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The coronavirus outbreak will lead to temporary budget deterioration and operating deficits for some UK universities next year, but the sector's finances are likely to bounce back in two to three years, according to a new report from the ratings agency Moody's.
Another week of pandemic-dominated HE news has highlighted the dilemmas facing universities and students over what to expect in the coming academic year says, Mike Ratcliffe, academic registrar at Nottingham Trent University.
As HEi-know publishes a Good Practice Briefing on the transition to online delivery of HE, James Clay, head of higher education and student experience at Jisc, who provides an overview in the Briefing, offers some tips on overcoming the challenges of making the shift to online teaching.
Introducing a new report on Postgraduate Education in the UK, published today by the Higher Education Policy Institute, the report’s author Dr Ginevra House, freelance researcher for Ebor Editing and Research, weighs up the prospects for postgraduate programmes and students in the wake of the pandemic.
Universities could be plunged into a 17 per cent deficit within two years if a “perfect storm” of four adverse factors hit at the same time, the Higher Education Funding Council for England has warned.
Such a scenario could wipe £5.4 billion off the sector’s own income forecasts, placing many institutions in a precarious financial position.
While this is the “worst case picture”, it could conceivably happen, HEFCE chief executive Madeleine Atkins told delegates at the Council’s annual meeting in London. Although currently no institution is at risk of insolvency, “there are worrying trends”, she added.
Senior university leaders and board members were presented with a slide showing how the vast majority of institutions could be deeply in the red by 2017-18 if four adverse factors combined.
Institutions would be able to deal with each of the four individually. “But if they occur in combination then the worst case picture puts institutions well below the zero line and that is bad news,” Professor Atkins said.
She describe the four “headwind” factors that could get stronger as:
Universities are currently predicting surpluses of 3.3 per cent by 2017-18. But if the four negative trends combined, HEFCE modelling puts the average deficit at 17 per cent, which in monetary terms would be £5.4 billion less income than universities themselves are forecasting.
The warning follows a HEFCE report on the financial health of the sector published earlier this week (see HEi-know Briefing Report 270) which said falling surpluses and cash levels and a projected rise in borrowing projected by English universities all point to a financially unsustainable future. While universities appear to be on a stable footing in the short term, there are wide variations in the financial position of individual institutions and greater volatility in funding is expected with growing reliance on income from overseas students.
Mary Curnock Cook, chief executive of Universities and Colleges Admissions Service, questioned HEFCE's modelling of a five per cent reduction in home and EU students, saying it did not match UCAS’s most pessimistic forecast.
Professor Atkins said it was a worst case scenario but each one could conceivably happen.
“We know the government wishes to balance the national books by 2021, and BIS is the largest unprotected department in Whitehall; we know the size of the 18-year-old cohort will decline through this period, and part-time numbers have gone down by 50 per cent and show no sign of recovery. We could see a reduction in overseas income if England is seen as not such an attractive place to come and study,” she said.
One government policy that might have that effect is its Prevent strategy and the new duties it places on universities to stop students being drawn into violent extremism. Yvonne Hawkins, HEFCE’s director of universities and colleges, said institutions would not be able to avoid acting on Prevent.
“You need to demonstrate that you are thoughtful and have appropriate policies and procedures in place and you have to demonstrate that you are acting on them and not seeing them as something that can be put in a drawer and ‘job done’,” she said.
HEFCE will be publishing a draft monitoring framework and approach which is proportionate, risk-based and low burden, she said. It was up to each institution to decide what was appropriate for their situation: it would not be a one-size-fits-all, she added.
Sir Nicholas Montagu, Chairman of the Council of Queen Mary University of London, said the government’s policies were “verging on xenophobia”.
“We have the Home Secretary making an apparently random suggestion recently that the English language test should be tightened up, and the Prime Minister out of the blue naming and shaming four universities for allegedly allowing extremism, plus the continuing refusal to remove students from the migration total. I have a lot more worries about that!” he said.
The potential for more government interference, bureaucracy and inappropriate metrics are all high among the list of worries higher education leaders have about the HE green paper proposals, an HEi-know vox pop of delegates at the HEFCE annual conference found. Here is how some responded to the question "What are the biggest challenges presented by the HE green paper?"
Bill Rammell, Vice-Chancellor of the University of Bedfordshire and former Labour higher education minister:
“I think there would be a real risk of funding coming from BIS under the green paper changes. HEFCE – and now the proposed Office for Students - has always been a buffer between government and universities and I think that provides some protection. You can see the danger if you look at places where buffers don’t exist. Local government, for example, where for over a decade there has been a manipulation of the data to put funding where it was wanted for ideological reasons and not where it was most needed.”
Professor Quintin McKellar, Vice-Chancellor of the University of Hertfordshire
“The issue of part-time study is not addressed in the green paper and I think this is a serious and sad omission. I am particularly worried about the inference that HMRC data might be used as a proxy for graduate employability. It could require us to compare the nurse from Hertfordshire with the doctor from Cambridge, for example. We know that a nurse from Hertfordshire earns about £4,000 more than a nurse from Edinburgh and if you used HMRC data as a proxy it would suggest that the nurses from Edinburgh are not at graduate level which is nonsense.”
Professor Barry Ife, Principal of the Guildhall School of Music & Drama
“There is a lot to applaud in the green paper but I take issue with the generalisations it makes about the teaching and research. I have been teaching in universities for 46 years, including heading a 5* research department at Kings College London and I have always been impressed by the care and dedication university teachers give to students. On the TEF it will come down to how intelligent we are going to be about proxies because you can’t measure teaching in a direct way, it is a mutual, interactive process over a long time.”
Paul Kirkham, owner and managing director of the Institute of Contemporary Music Performance (ICMP)
“As an “alternative” provider I applaud the green paper proposals. We need them if we are going to have a strong, innovative higher education sector and the sooner the changes are introduced the better. There most certainly needs to be a separation between the regulator and the funder. The funder doesn’t necessarily have to be BIS, it could be an independent body.
Dr Louise Naylor, Director of the Unit for the Enhancement of Learning and Teaching, University of Kent
“The high principles in the green paper are fine. The focus on improving the student experience, broadening diversity and improving the data on employment are all good. It’s the implementation that could prove problematic because it could all become very bureaucratic. Remember what happened when the QAA started work? There’s already talk about a TEF2. We had shelves of folders of evidence that it said it required. We also have to be alert to the way metrics are to be used. If they are to be meaningful then they should be seen as indicators and not determinators of where universities are on whatever scales are decided.”
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