WEEKEND READING: Change is our ally by Professor Sir Chris Husbands

WEEKEND READING: Change is our ally by Professor Sir Chris Husbands

This blog has been kindly written for HEPI by Professor Sir Chris Husbands, who was Vice-Chancellor of Sheffield Hallam University between 2016 and 2023, and is now a Director of  Higher Futures, working with university leaders to lead sustainable solutions to institutional challenges.

The scale of the funding challenge in higher education is widely known, though almost every week brings news of fresh challenges and responses. Real term funding for undergraduate teaching in 2025 is close to 1997 levels – levels which led the Blair government to introduce £1,000 top-up fees. Some commentators have argued that the scale of the challenge now is as great as the 1981 cuts in government funding for universities, which reduced spending on universities by 15%, and saw Salford University lose 44% of its income.

As contemporary funding challenges have intensified, growth options have become more difficult:

  • international student numbers have either stalled or declined;
  • undergraduate growth, although evident, has not tracked demographic trends;
  • the Office for Students has identified persistent optimism bias in the sector’s funding projections; and
  • competitive pressures are multiplying.

In many countries, flexible for-profit providers are growing fast, especially in professional and post-graduate education. Many of these are backed by funds with deep investment pockets; some UK for-profit providers are growing very quickly and the expansion of private provision in Germany, France and Canada has been remarkable. In summary, the funding challenge is not only real but increasingly profound.

Institutional responses to these challenges have been extensive. Almost all universities are now undertaking significant change programmes. There have been major strides in revising operating models, especially for professional and support services, and the impact has been significant. On the other hand, although portfolio reviews are widespread, there have been fewer developments in reshaping business models for teaching and research, though some do exist. Core delivery arrangements largely remain based on a two-semester or three-term model. Staff-student ratios which, as the King’s College Vice-Chancellor Shitij Kapur has repeatedly emphasised are low by international standards, have not been significantly shifted. Undergraduate study remains relatively inflexible. Module sharing and simplified credit transfer arrangements remain small scale. Estate use has not been significantly intensified. All this suggests that individual institutions are finding it difficult to look at the challenge strategically with an eye to the longer term shape, size, structure and nature of the university. There is a lot happening in individual change plans, but probably not enough. Without a secure and sustainable core academic model, institutions will be forced into repeated restructurings, which will not be comfortable for them or for the sector more generally.  

This is the background to the important Jisc-KPMG report Collaboration for a sustainable future, which was the subject of a this week’s HEPI / Jisc webinar. For all the evidence of individual institutional change, the report argues that a collaborative approach is needed to secure sustainability and reshape the sector. Institutions need to find ways to work together, in back-office functions, in professional services and perhaps in academic delivery. The report acknowledges that there are technical difficulties to overcome, including the requirement to pay VAT on shared services and the need to navigate competition law, though these need to be genuinely tested in practice, but it also argues that the deeper barriers to effective collaboration are cultural. 

The ingrained habit of individual autonomy, even and perhaps especially in non-competitive services (as Nick Hillman reinforced, no one chooses their undergraduate degree based on the university’s finance system) is a major barrier to significant change.  Moreover, the report acknowledges that collaboration and shared service arrangements are unlikely to deliver cost savings in the short-term – and just now a good deal of thinking in the sector seems to be shaped by Keynes’ dictum that ‘in the long-run we are all dead’. Institutions are caught between the economic realities of the funding challenge and the cultural challenges of collaboration.

In Four Futures, my HEPI paper published in June last year, I argued that the financial and funding circumstances which produced the sector we have no longer exist. Government is unwilling or unable to pay for the sector most university leaders would like. I argued that there were some policy choices for higher education, and that the sector will almost certainly be different in the future. There are public policy questions here, but there are also questions and challenges for institutions. That means strategic choices for leaders, with universities being much clearer about the things they can do well, and do well sustainably, and building different relationships with other institutions. Leadership matters. As the Jisc / KPMG report observes:

Given the current trajectory, there is a window of opportunity for institutions to act now and help drive this forward before they are compelled into action by necessity.

Competition over the past decade has undoubtedly delivered benefits, and we should not understate those, especially in estate investment, student experience, teaching quality and research performance. But competition has also delivered homogeneity, duplication and overlap, and that needs to change.   And for that, as the Jisc / KPMG report identifies, the leadership culture needs to change. Hyper-competitiveness has driven institutionally focused leadership behaviours and associated performance indicators, targets and rewards. But there have been different leadership assumptions in higher education in the past, and other sectors have grappled with the challenge of changing leadership culture. The most successful school improvement initiative of the past generation was London Challenge, in which the performance of schools across the capital was significantly raised. One of the most important shifts was a cultural one, persuading headteachers to think not about ‘my school’ but about ‘[all] our children’: success across the system was a leadership challenge for all.

The Jisc / KPMG Report is strong on the potential for collaboration to shape the future of the system, though it also makes painful reading on the challenges which have bedevilled this in the past. In the current context, government is unlikely to provide additional funding. The private sector could no doubt provide standardised sector-wide services, but the risks of a single supplier for key services are enormous. If government is not the solution, if the private sector is not the solution, if the status quo is not sustainable, the answer must be imaginative and engaged leadership which is not simply about ‘my institution’ but also about ‘our future’.

This week’s HEPI / Jisc webinar on ‘Competition or collaboration? Opportunities for the future of the higher education sector’ can be watched back here.

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