Tag: sustainability

  • OfS continues to sound the alarm on the financial sustainability of English higher education

    OfS continues to sound the alarm on the financial sustainability of English higher education

    For the third year in a row, the English higher education sector’s collective financial performance is in decline.

    That is the conclusion of the latest annual assessment of the sector’s financial sustainability from the Office for Students (OfS), based on finance returns for 2023-24.

    Overall, after stiff warnings this time last year about the risks of system-wide provider deficits if projected student number growth failed to materialise, OfS says that many providers are taking steps to manage their finances, by reducing costs and downgrading recruitment growth projections. It remains unlikely, says OfS, that a large provider will become insolvent in the coming financial year.

    But 43 per cent of providers are forecasting a deficit for the current financial year 2024–25, and there is an overall decline in overall surplus and liquidity – albeit with the expectation of growth in the years ahead. While larger teaching-intensive and medium sized providers were more likely to report a deficit, there is also quite a lot of variation between providers in different groups – meaning that institution type is not a reliable guide to financial circumstances.

    Recruitment woes

    Student recruitment is the most material driver of financial pressure, specifically, a home and international student market that appears insufficient to fill the number of places institutions aspire to offer. The broad trend of institutions forecasting student number growth in hopes of offsetting rising costs – including national insurance and pension contributions – makes it unlikely that all will achieve their ambitions. There’s evidence that the sector has scaled back its expectations, with aggregate forecast growth until 2027–28 lower than previous forecasts. But OfS warns that the aggregate estimate of an increase of 26 per cent in UK entrants and 19.5 per cent in non-UK entrants between 2023–24 and 2027–28 remains too optimistic.

    Questioned further on this phenomenon, OfS Director of Regulation Philippa Pickford noted that there is significant variation in forecasts between different providers, and that given the wider volatility in student recruitment it can be really quite difficult to project future numbers. The important thing, she stressed, is that providers plan for a range of possible scenarios, and have a mitigation plan in place if projections are not achieved. She added that OfS is considering whether it might give more information to providers upfront about the range of scenarios it expects to see evidence of having been considered.

    Storing up trouble

    While the focus of the financial sustainability is always going to be on the institutional failure scenario, arguably an equally significant concern is the accumulation of underlying structural weaknesses caused by year-on-year financial pressures. OfS identifies risks around deferral of estates maintenance, suspension of planned physical or digital infrastructure investments, and a significant increase in subcontractual (franchising) arrangements that require robust governance.

    All this is manifesting in some low-key emergency finance measures such as relying on lending to support operating cashflow where there is low liquidity at points in the year, selling assets, renegotiation of terms of covenants with lenders, or seeking injections of cash from donors, benefactors or principal shareholders. Generally, and understandably, the finance lending terms available to the sector are much more limited than they have been in the past and the cost of borrowing has risen. The general increases in uncertainty are manifest in the increased work auditors are doing to be able to confirm that institutions remain a “going concern.” Such measures can address short-term financial challenges but in most cases they are not a viable long term strategy for sustainability.

    OfS reiterates the message that providers are obligated to be financially sustainable while delivering a high quality student learning experience and following through on all commitments made to students – but it’s clear that frontline services are in the frame for cuts and/or that there is a limit to the ability to reduce day-to-day spending or close courses even when they are loss-making if there is likely to be an impact on institutional mission and reputation. Discussions between OfS and directors of finance point to a range of wider challenges around increased need for student support, the difficulty of recruiting and retaining staff, the increasing costs of conducting research, and shifts in the student accommodation rental market. Some even pointed to the cost of investment in AI-detection software.

    The future is murky

    The bigger picture points to long term (albeit unpredictable) shifts in the underlying financial model for HE. Philippa Pickford’s view is that institutions may need to shift from taking a short-term view of financial risks to a longer-term horizon, and will need to grapple with what a sustainable long term future for the institution looks like if the market looks different from what they have been used to. Deferral of capital investment, for example, may keep things going for a year or two but it can’t be put off indefinitely. There’s a hint in the report that some institutions may need to invest in greater skills, expertise and capacity to understand and navigate this complicated financial territory – and OfS is taking an increased interest in multi-year trends in financial performance, estates data and capital investment horizons in its discussions with providers.

    The situation remains, however, that OfS is primarily empowered to monitor, discuss, convene and, if necessary, issue directives relating to student protection. Activity of this nature has ramped up considerably in the past year, but financial sustainability remains, at base, individual providers’ responsibility – and system-level intervention on things like changing patterns of provision, or management of the wider impact of institutional insolvency, nobody in particular’s. Government is, of course, aware of the problem but has not yet given a steer on whether its upcoming HE reform measures, expected to be published in the summer after the spending review, will grasp the nettle in delivering the support for transformation the sector hopes to see.

    OfS has now said that it is talking to government to put forward the view that there should be a special administration regime for higher education. This signals that while the immediate risks of institutional closure or “disorderly market exit” are low, the pressures on a small number of institutions remain considerable. On the assumption of little or very modest changes in the funding model in the upcoming spending review, and ongoing competitive pressures, there will almost inevitably be losers.

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  • Financial sustainability in UK higher education: the limits of self-help?

    Financial sustainability in UK higher education: the limits of self-help?

    • Matthew Howling, Principal Associate at Mills & Reeve LLP, and Poppy Short, Partner at Mills & Reeve, reflect on a February round table discussion amongst university leaders chaired by Nick Hillman of HEPI.

    On 26 February 2025, a group of 18 university leaders, advisors and stakeholders met to reflect on how universities can best position themselves in the current financial climate. The meeting was a follow-up to our joint dinner with HEPI on 10 October 2024 at the Royal Society in London. As we remarked at the time, there was a clear desire to continue the conversation, and the fast-paced and content-rich discussion here was a testament to that desire.

    Our theme was the limits of self-help. Given the current financial headwinds, institutions have been restructuring their activities on an unprecedented scale. However, once the severance schemes, asset sales and course closures have come to pass, will these remedies be sufficient to put institutions back on a sound enough financial footing to continue to serve their students and communities for the longer term? The unspoken and yet resounding understanding across the group was that further and more radical changes are needed across the sector to stabilise the situation.

    What is the role of the private providers in helping to improve the financial health of the sector? Several voices suggested that foreign investment could help to save certain British universities and that the sector needs to be less reticent about such investment. Other participants thought that, while foreign investment might work in the context of smaller providers, it was less likely to be successful when dealing with larger, more complex institutions, particularly those that have a legacy of contracts with trade unions and other stakeholders. It is well known that a number of private providers and foreign investors are waiting in the wings to acquire UK degree-awarding powers from distressed higher education providers if the opportunity presents itself. The sector should be prepared to consider its response to this.

    In a recent HEPI poll, when students were presented with a list of 10 options for what could happen if their own higher education institution were to fall over financially, a takeover by a foreign company was the joint least popular option. Foreign investors would have to work hard to tackle these negative perceptions.

    In some ways, the antithesis of self-help is a forced merger. It was noted that, in other jurisdictions, forced mergers are not as uncommon as might be thought. Estonia, France, Germany and Denmark had all experienced forced university mergers. Is this the direction of travel for the United Kingdom? There was a feeling that, in Wales and Scotland, there was a willingness to consider higher education provision on a more holistic basis than in England.

    In terms of state support, it was felt that the sector had to acknowledge government spending pressures. The evidence of cuts to budgets elsewhere (such as foreign aid) strongly suggests that there will be no chance of further increases to the home undergraduate tuition fee in the foreseeable future and despite the need, other forms of financial help are not expected.

    If government funding will not be forthcoming, the other obvious source of funds is existing lenders. Participants observed that, while sector borrowing was high, much of the recent debt taken on by providers was in the form of revolving credit facilities (which provide short-term funds up to a specified limit for a stipulated period of time, all or part of which can be repaid and re-borrowed as required), rather than the term loans that universities have traditionally found more attractive (which provide long-term funds for a specified period of time). There was concern that, in some cases, banks might be considering withdrawing those lines of credit when they come up for renewal. There was also a concern about how many institutions might be relying on revolving credit facilities to satisfy the OfS’s minimum liquidity requirements. There was anecdotal evidence that certain banks were focussing their new lending on higher tariff institutions, partly because of credit risk but also because of the ancillary opportunities to make money from larger institutions. This risks a self-fulfilling cycle of winners and losers.

    It was generally felt that a new Special Administration Regime would make life easier as opposed to harder in terms of access to funds. It is not necessarily about encouraging enforcement by banks. It is highly unlikely that a UK clearing bank would want the adverse publicity associated with enforcing against a UK university (although foreign lenders may be less PR squeamish). However, giving lenders a clear line of sight as to a recovery process, even if not used in practice, may further encourage commercial lending to the sector. 

    Beyond the question of more money, there was a feeling that certain sector skills were lacking to navigate these troubled waters. As one participant put it, transformation expertise was what was needed, not just transformation funds. And how does all this transformation happen at pace?

    Above all, there was a sense that the sector needed to move as one on certain key issues. One example was the increased costs for post-92 institutions associated with the Teachers’ Pension Scheme. Another key area where the sector needs to work together is soliciting the opinion of the Competition and Markets Authority (CMA) on how universities can collaborate without breaching competition law. There were grounds for optimism: the CMA guidance on applying the competition rules to sustainability agreements and collaborations is an example of the CMA taking a proactive approach to assuage concerns that competition law should not hinder legitimate collaboration where this was in the public good. In other areas, such as procurement and shared services, it was felt that there was much that the sector could be doing together to be more efficient and reduce the cost of delivery.

    As an hour of rapid and informed discussion drew to a close, perhaps the overall conclusion was that it is only by acting collectively that the sector can arrive at solutions to allow institutions to truly put their houses in order at an individual level. Universities need to start planning how they will support themselves through this next phase. To survive they will need to mobilise themselves to work at pace to foster local and regional connections to drive forward the priorities for their regions.



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  • Carnegie Foundation launches sustainability classification pilot

    Carnegie Foundation launches sustainability classification pilot

    The Carnegie Foundation for the Advancement of Teaching and the American Council on Education announced Thursday that they have launched a pilot of their new Sustainability Elective Classification, a designation that will recognize institutions of higher education that “embed sustainability and climate action into their core missions,” according to the announcement.

    The pilot program will include 21 colleges and universities from across the 50 states and Puerto Rico and will aim to refine the criteria for the classification while working to guarantee that it is attainable to institutions of all sizes and types. The classification is expected to consider “institutional efforts across curriculum, research, operations, community engagement, and workforce development, with an emphasis on preparing students for careers in sustainability fields.”

    “The Elective Classification for Sustainability recognizes how institutions of higher education are essential to the future of American innovation and progress, within and beyond their classrooms,” Timothy F. C. Knowles, president of the Carnegie Foundation, said in the announcement. “These pilot institutions are helping to forge the way.”

    The Sustainability Elective Classification is scheduled to launch in early 2026. The Carnegie Foundation and ACE are also looking for a university or institution to serve as the classification’s administrative and operational host.

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  • Gaps in sustainability literacy in non-STEM higher education programmes

    Gaps in sustainability literacy in non-STEM higher education programmes

    by Erika Kalocsányiová and Rania Hassan

    Promoting sustainability literacy in higher education is crucial for deepening students’ pro-environmental behaviour and mindset (Buckler & Creech, 2014; UNESCO, 1997), while also fostering social transformation by embedding sustainability at the core of the student experience. In 2022, our group received an SRHE Scoping Award to synthesise the literature on the development, teaching, and assessment of sustainability literacy in non-STEM higher education programmes. We conducted a multilingual systematic review of post-2010 publications from the European Higher Education Area (EHEA), with the results summarised in Kalocsányiová et al (2024).

    Out of 6,161 articles that we identified as potentially relevant, 92 studies met the inclusion criteria and are reviewed in the report. These studies involved a total of 11,790 participants and assessed 9,992 university programmes and courses. Our results suggest a significant growth in research interest in sustainability in non-STEM fields since 2017, with 75 studies published compared to just 17 in the preceding seven years. Our analysis also showed that Spain, the United Kingdom, Germany, Turkey, and Austria had the highest concentration of publications, with 25 EHEA countries represented in total. The 92 reviewed studies were characterised by high methodological diversity: nearly half employed quantitative methods (47%), followed by qualitative studies (40%) and mixed methods research (13%). Curriculum assessments using quantitative content analysis of degree and course descriptors were among the most common study types, followed by surveys and intervention or pilot studies. Curriculum assessments provided a systematic way to evaluate the presence or absence of sustainability concepts within curricula at both single HE institutions and in comparative frameworks. However, they often captured only surface-level indications of sustainability integration into undergraduate and postgraduate programmes, without providing evidence on actual implementation and/or the effectiveness of different initiatives. Qualitative methods, including descriptive case studies and interviews that focused on barriers, challenges, implementation strategies, and the acceptability of new sustainability literacy initiatives, made up 40% of the current research. Mixed methods studies accounted for 13% of the reviewed articles, often applying multiple assessment tools simultaneously, including quantitative sustainability competency assessment instruments combined with open-ended interviews or learning journals.

    In terms of disciplines, Economics, Business, and Administrative Studies held the largest share of reviewed studies (26%), followed by Education (23%). Multiple disciplines accounted for 22% of the reviewed publications, reflecting the interconnected nature of sustainability. Finance and Accounting contributed only 6%, indicating a need for further research. Similarly, Language and Linguistics, Mass Communication and Documentation, and Social Sciences collectively represented only 12% of the reviewed studies. Creative Arts and Design with just 2% was also a niche area. Although caution should be exercised when drawing conclusions from these results, they highlight the need for more research within the underrepresented disciplines. This in turn can help promote awareness among non-STEM students, stimulate ethical discussions on the cultural dimensions of sustainability, and encourage creative solutions through interdisciplinary dialogue.

    Regarding factors and themes explored, the studies focused primarily on the acquisition of sustainability knowledge and competencies (27%), curriculum assessment (23%), challenges and barriers to sustainability integration (10%), implementation and evaluation research (10%), changes in students’ mindset (9%), key competences in sustainability literacy (5%), and active student participation in Education for Sustainable Development (5%). In terms of studies discussing acquisition processes, key focus areas included the teaching of Sustainable Development Goals, awareness of macro-sustainability trends, and knowledge of local sustainability issues. Studies on sustainability competencies focussed on systems thinking, critical thinking, problem-solving skills, ethical awareness, interdisciplinary knowledge, global awareness and citizenship, communication skills, and action-oriented mindset. These competencies and knowledge, which are generally considered crucial for addressing the multifaceted challenges of sustainability (Wiek et al., 2011), were often introduced to non-STEM students through stand-alone lectures, workshops, or pilot studies involving new cross-disciplinary curricula.

    Our review also highlighted a broad range of pedagogical approaches adopted for sustainability teaching and learning within non-STEM disciplines. These covered case and project-based learning, experiential learning methods, problem-based learning, collaborative learning, reflection groups, pedagogical dialogue, flipped classroom approaches, game-based learning, and service learning. While there is strong research interest in the documentation and implementation of these pedagogical approaches, few studies have so far attempted to assess learning outcomes, particularly regarding discipline-specific sustainability expertise and real-world problem-solving skills.

    Many of the reviewed studies relied on single-method approaches, meaning valuable insights into sustainability-focused teaching and learning may have been missed. For instance, studies often failed to capture the complexities surrounding sustainability integration into non-STEM programs, either by presenting positivist results that require further contextualisation or by offering rich context limited to a single course or study group, which cannot be generalised. The assessment tools currently used also seemed to lack consistency, making it difficult to compare outcomes across programmes and institutions to promote best practices. More robust evaluation designs, such as longitudinal studies, controlled intervention studies, and mixed methods approaches (Gopalan et al, 2020; Ponce & Pagán-Maldonado, 2015), are needed to explore and demonstrate the pedagogical effectiveness of various sustainability literacy initiatives in non-STEM disciplines and their impact on student outcomes and societal change.

    In summary, our review suggests good progress in integrating sustainability knowledge and competencies into some core non-STEM disciplines, while also highlighting gaps. Based on the results we have formulated some questions that may help steer future research:

    • Are there systemic barriers hindering the integration of sustainability themes, challenges and competencies into specific non-STEM fields?
    • Are certain disciplines receiving disproportionate research attention at the expense of others?
    • How do different pedagogical approaches compare in terms of effectiveness for fostering sustainability literacy in and across HE fields?
    • What new educational practices are emerging, and how can we fairly assess them and evidence their benefits for students and the environment?

    We also would like to encourage other researchers to engage with knowledge produced in a variety of languages and educational contexts. The multilingual search and screening strategy implemented in our review enabled us to identify and retrieve evidence from 25 EHEA countries and 24 non-English publications. If reviews of education research remain monolingual (English-only), important findings and insights will go unnoticed hindering knowledge exchange, creativity, and innovation in HE.

    Dr. Erika Kalocsányiová is a Senior Research Fellow with the Institute for Lifecourse Development at the University of Greenwich, with research centering on public health and sustainability communication, migration and multilingualism, refugee integration, and the implications of these areas for higher education policies.

    Rania Hassan is a PhD student and a research assistant at the University of Greenwich. Her research centres on exploring enterprise development activities within emerging economies. As a multidisciplinary and interdisciplinary researcher, Rania is passionate about advancing academia and promoting knowledge exchange in higher education.

    Author: SRHE News Blog

    An international learned society, concerned with supporting research and researchers into Higher Education

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