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University leadership

Opportunity and risk: universities prepare for an uncertain future

Brexit, funding changes and a tarnished reputation are some of the issues facing the sector. But it is ready for the challenge

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Harriet Swain

@harrietswain

Wed 7 Feb 2018 07.30 GMT

The past few months have not been easy for universities. Political volatility surrounding the general election and Brexit, pensions disputes, attacks on vice-chancellor pay, and major policy changes brought in by the Higher Education and Research Act have come on top of day-to-day efforts to maintain solvency and student numbers.

So the glimmers of optimism found by the authors of new research, commissioned by the Guardian, into how universities can plot a course through these uncertain times were unexpected.

「One of the things I was particularly surprised by was that it wasn』t all doom and gloom,」 said Helene Moran, a director of Shift Learning, which carried out the research.

It wasn't all doom and gloom

The research, supported by HSBC and in partnership with Universities UK, included 51 in-depth telephone interviews conducted at the end of last year with vice-chancellors and those with direct responsibility for financial or operational strategy, and a further survey, which received 59 responses. It looked at how the current financial climate was affecting universities』 strategic decision-making.

Many respondents said that while there had been changes over a number of years, 2017 was the year they really started to see the impact, said Moran. And while some universities expected to continue to thrive, others felt they were 「one policy change away from throwing in the towel」.

The challenges identified in the report – and possible ways to tackle them – were the focus of a roundtable, supported by HSBC, held at the Guardian’s offices in London on 31 January and attended by vice-chancellors and other senior higher education leaders and thinkers.

An uncertain environment

There was general agreement that the underlying challenge was uncertainty. 「There is uncertainty around variable fees,」 said Adam Tickell, vice-chancellor of the University of Sussex. 「There is uncertainty around the fee level. There is of course uncertainty about the stability of the government and the putative policy of the opposition front bench and treasury team.」 Universities could get on with anything if they knew a bit more about what to expect, he said.

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One result is that universities are putting aside money to manage the uncertainty, and not spending it on improvements elsewhere, said Tickell. But there is a danger that the government will regard this as evidence that universities have cash to spare.

This is not the case, said Ian Diamond, vice-chancellor of the University of Aberdeen. There has been a dramatic reduction in capital funding coming from governments across the UK since 2010, which means that to maintain buildings and develop facilities, universities have to create surpluses and then invest them.

Jonathan Graham, managing director, head of sectors, UK commercial banking at HSBC, said there were plenty of options available for universities wanting to raise money and invest in their estates. 「The continued investment of universities into their campus, and also to create what is perceived as value for money for new students coming in, I think is absolutely important if they are to remain competitive in this environment,」 he said.

Jane Madeley, chief financial officer at the University of Leeds, said universities had always had to deal with some element of risk and that they needed to stay true to their mission and not drop plans when new uncertainties arose.

According to Chris Hale, director of policy at Universities UK, part of the challenge is that universities are being encouraged to be more market-like and invest in the student experience, while the political environment is one of reining in spending.

Variable fees

The possibility that universities could be encouraged to charge different fees for different courses presents another potential complication. Tickell said he understood there was significant disagreement in government over this policy. He said it was not clear to him what it would achieve. From the data available, his university could not show that it cross-subsidised more expensive-to-run science courses with money from humanities courses in the way people thought.

This was a surprise for Jack Britton, senior research economist at the Institute for Fiscal Studies, since an IFS report [pdf] last summer found universities』 average funding for the cheapest-to-run courses increased by about 50% following the 2012 reforms that allowed them to charge fees of up to £9,000, whereas for the more expensive-to-teach courses, the increase was far lower. But he too felt more information was needed on cross-subsidy.

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Shirley Atkinson, vice-chancellor of the University of Sunderland, which was unusual in introducing differing fee levels in 2012, said this had not greatly appealed to students. 「What they were interested in was being able to afford to come to university, being able to live well there, being able to travel to get there. They were far more interested in what we could offer them in terms of support.」

This was exactly what Diamond had heard from students in Wales when he headed an independent review of higher education funding and student finance there last year. 「It’s not just about the classroom. It’s about growing as a citizen and they wanted a fee structure which enabled them to do that,」 he said. 「That’s why we put the effort around maintenance and enabling people to benefit from the time they spent at university.」

Was there anyone in the sector who thought differential fees was a good idea? 「It’s the exact opposite,」 said Richard Dale, executive director of finance at the University of Newcastle. Variable fees could, at least in the short term, adversely affect numbers going into Stem subjects. He found it ironic that so much attention was being given to the internal fees market rather than what it took to make the UK competitive, especially given Brexit.

Brexit

The challenges posed by Brexit are some of the most serious facing the sector, the roundtable agreed. While university leaders said student numbers had so far remained stable, they felt this was unlikely to continue. They were particularly concerned about losing EU staff and research funding. And PhD numbers – which Luke Georghiou, deputy vice-chancellor of the University of Manchester, described as a 「futures market」 – are significantly down among EU and international students, reflecting the UK’s declining reputation abroad. While currency crashes have caused disruptions to the international student market in the past, it always affected one part of the world and not another, said Georghiou. The effects of Brexit will be 「a tidal wave that hits all of the sector at the same time」.

Brexit will be a tidal wave that hits all of the sector at the same time

Alex de Ruyter, director of the Centre for Brexit Studies at Birmingham City University, suggested certain areas of the UK would be particularly hard hit, including those where the university was virtually the single largest employer and often places that closely mapped leave-voting areas. Even universities that did not rely on EU students would be affected by any drop in numbers due to the knock-on effects on competition for applicants.

Another problem, suggested Tickell, is that the rest of the world is moving on. Canada and Australasia have increased international student recruitment thanks to many students rejecting Trump’s America. European universities are teaching in English. Chinese universities are improving rapidly.

Even if students are taken out of the UK’s net migration targets – something most at the roundtable expected to happen – the policy should not be to keep numbers stable but to seek to recruit more, said Paul Blomfield, shadow minister for exiting the EU and MP for Sheffield Central. 「Stable numbers are failure in a growing market,」 he said. That means offering more attractive options for post-study work and an easier visa application process.

A tarnished reputation

While the reputation of UK higher education is at risk abroad, it is also under threat at home. Georghiou suggested it was 「open season on universities」, while Blomfield called it 「the first time in many years that at the top of government the sector isn』t celebrated as one of our great strengths as a country, which it is」.

It's open season on universities

Yet David Morris, vice-chancellor’s policy officer at the University of Greenwich, said it was important not to be too defensive, and to acknowledge that, compared to other sectors, universities had been doing pretty well. 「Notwithstanding all the challenges that have just been talked about, comparing universities to schools, FE colleges especially, local authorities, we are still a generously funded, lightly regulated sector where staff on the whole are generally paid good middle class salaries,」 he said.

Those attending the roundtable also conceded that uncertainty surrounding the sector could bring opportunities. Diamond said the Industrial Strategy Challenge Fund presented a chance for consortia of universities to work together to make an impact in some of the UK’s most deprived areas.

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Hale suggested that rather than trying to replicate streams of funding lost from Europe, there could be ways of enhancing or repurposing existing funding mechanisms, such as the apprenticeship levy, to help the sector progress.

It was up to universities to ensure that the UK remained an attractive place to study and work, said Tickell. Most were still trying to identify and mitigate the risks. 「We are trying to work out what the implications will be. It is partly in our hands to make the future,」 he said.

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本文來源：https://www.theguardian.com/higher-education-network/2018/feb/07/opportunity-and-risk-universities-prepare-for-an-uncertain-future