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Higher education leaders must be ready to think ahead and resist the temptation to respond only to short term changes in the current turbulent policy environment, says Rachel Hewitt, Director of Policy and Advocacy at the Higher Education Policy Institute.

 

Last Thursday, HEPI and Advance HE held the first in our annual season of House of Commons breakfast seminars. The session, titled ‘Boom or bust? How can institutions – and the regulator – best respond to the new market pressures in HE?’, was set off by our three speakers each giving impassioned speeches about their experience of the market trends in higher education.

Adam Tickell provided insights from his experience as the Vice Chancellor for the University of Sussex. Meanwhile Barry Sheerman, MP for Huddersfield, and Rachel Wolf, former No.10 Policy Adviser and now founding partner of Public First and member of the Civic University Commission Steering Group, both reflected on the political context in which universities were responding to the market pressures. Discussions covered a wide range of areas but one of the key themes that emerged was that to understand and respond to the new market pressures in higher education, universities need to be thinking short, medium and long term.

This is especially important in the midst of the current tumultuous political environment which is encouraging a short-term focus, with political debate entirely focused on getting through the next few months, if not just the next fortnight. Higher education is not immune to this trend of short-termism, as we are all focused on what the outcomes of the Post-18 Funding Review will be, wanting to understand the impact of what the Brexit deal, or no deal, will mean for our universities and furthermore what the intentions are of the new higher education minister, Chris Skidmore, in his post.

However, as discussed at our seminar, focusing on only these short-term issues leaves universities at the mercy of the larger market forces potentially coming down the line. One particular challenge is the policy issue of university places and student recruitment. Universities are currently competing to recruit from a relatively small pool of young people, as the eighteen-year-old population in the UK is currently at the lowest levels in 10+ years, leading to the financial instability in higher education.

However, this trend in the number of young people coming through the university system is about to be reversed, with numbers climbing every year from 2020 onwards. Our own research shows that taking conservative estimates of trends in higher education participation continuing, and taking into account a Brexit-related reduction in demand, we will need 300,000 more higher education places by 2030. From that perspective, universities need to be planning for how they are going to find places for these students, and how their approach to recruitment will change over this period.

However short-term market pressures could change the direction of this trend entirely. We are at risk of student number caps from either political direction. If Augar is to propose fees of £6,500, it is likely that this will be accompanied by a cap in student numbers, potentially through the rumoured limits on access to student loans for students who have less than three Ds at A level.

Equally, a general election, as highlighted by Rachel Wolf at the seminar, could bring about a Labour government, with their commitment to the removal of tuition fees. It is difficult to see how this could be done without placing a cap on the number of students universities are able to recruit, as with the current system in Scotland, or the Chilean system.

By just examining this one area of higher education policy, we can clearly see the market pressures that universities are up against today. While, as was highlighted by one audience member at the seminar, universities have not been subjected to austerity in the same way as many public service organisations, they are subject to ever-changing market forces which requires planning for a whole range of scenarios. More than ever, university leadership needs to be thinking short, medium and long term to be remain competitive.

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