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Rising staff costs putting universities under greater pressure, warns Moody's

UK universities will face greater financial pressure over the next three years due to rising staff costs as they accommodate more students, retain talent and negotiate pay rises,  Moody's has warned.

New outreach programme launched as report warns widening access targets will be missed

The Higher Education Funding Council for England has launched a new £90 million outreach programme as a report warned that ambitious widening participation targets set by the government are likely to be missed.

The four-year national collaborative outreach programme announced by HEFCE aims to help meet the Prime Minister’s goal to double the participation of students from disadvantaged backgrounds entering higher education by 2020.

But a study by the Social Market Foundation has found that on present trends the sector will fall short of this target by 5 percentage points.

A report on the findings warns that the shortfall could be even greater if labour market conditions improve sufficiently to persuade more young people to go straight into work or take up an apprenticeship scheme, or the scrapping of maintenance grants impacts on entry into HE by students from poorer backgrounds.

While 28.8 per cent more young full-time students from disadvantaged backgrounds entered HE in 2014/15 compared to 2009/10, this headline improvement masks large difference in intakes by different institutions, the report says.

Over this period 9 universities actually decreased their intake of disadvantages students, while another 12 saw no change.

Emran Mian, author of the research and director of the Social Market Foundation, commented:

“Improving the performance of those institutions which have made little progress may require institutions themselves to get much more involved in raising prior attainment – for instance, by providing tuition or summer schools. Outreach alone may be insufficient.”

Commenting on the report, Professor Les Ebdon, Director of Fair Access to Higher Education, said:

“There are more young people from disadvantaged backgrounds in full-time higher education than ever before. Under OFFA's single focus access regulation, there have been substantial and sustained increases in higher education participation by disadvantaged students. Statistics from UCAS show that entry rates for young people from the most disadvantaged neighbourhoods have increased by 65 per cent since 2006.

“Despite this record progress, I have made it very clear that meeting the Prime Minister's ambitious fair access goals will require a further acceleration of change. The guidance I issued to universities and colleges last month, which was informed by guidance to me from the Minister, sets out my expectations. I want universities and colleges to sharpen their focus on outcomes, and to increase the scale and ambition of their long-term outreach activities. This will help ensure we make the further, faster progress we need to ensure that talented people from disadvantaged backgrounds are able to access the life changing benefits of higher education.”

The new HEFCE outreach programme will be funded at £30 million in the first year of operation and £60 million thereafter, with the aim of boosting young HE participation rates in the most disadvantaged areas in England.

HEFCE said guidance has been issued to invite proposals from consortia which will come together to deliver highly focused outreach. The programme will deliver activity where HEFCE’s analysis shows that participation in HE is particularly low overall, and lower than expected given the Key Stage 4 attainment levels in those areas. Consortia will deliver a suite of outreach activity which will support and encourage young people in school years 9 to 13 to consider HE a viable choice in meeting their ambitions.

Universities and Science Minister Jo Johnson said:

"We’re seeing record application rates to our universities but too many students from the most disadvantaged backgrounds still miss out. This important outreach programme will support universities to widen access by building partnerships with local schools and help young people reach their full potential."

HEFCE Chief Executive Madeleine Atkins said:

"We are keen to support the Prime Minister’s goal and the National Collaborative Outreach Programme offers a new way of focusing outreach geographically where our analysis shows rapid progress can be made.

"We look forward to working with higher education providers to bring together consortia to realise this programme. We know from other programmes, most recently the National Networks for Collaborative Outreach, that institutions can bring an active and imaginative approach to outreach delivered through collaboration. The new programme will enable consortia to deliver an exciting range of activity to support students from disadvantaged backgrounds to realise their talents and ambitions."

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