A Perspective on the Challenges Facing
Higher Education
Professor Les Ebdon CBE
Vice Chancellor, University of Bedfordshire
Golden
Age
State
Universities
Government
Aided
Government
Molested
Funding
Government Control
A Golden Age?
• Variable fees introduced 2006/07
• 21.5% funding increase in English HEIs
2004/05 – 2007/08
• Biggest increases tuition fees, 30.1%
• Generous salary increases, 44.5%
• Bursaries, grants and loans
• Protected science budget
• Rising student demand - home and international
First signs of change
• ELQs £100m
• Cap
• Budget cuts 2009 £164m
• Funding letter 2010 £449m
• Unmet student demand
• University Modernisation Fund + £270m
• CSR 2010? £600m
• No real terms increase in public spending until 2018
Creeping molestation
• Fair access
• RAE → REF
• Funding concentration
• UISS Select Committee Report
• Contestability
• Employer Engagement
• STEM ringfence
• TRAC
• Student Charters
• Teaching Funding Methodology
Leaving it all to Browne
• Democratic deficit
• Additionality
• Conditionality
• Fee level
• Variability and the market
• Student support
• Graduate contribution
• Part-time
• Postgraduate
‘Fair Funding For All’
million+
• Treat FT and PT equally
• Single unified and simplified system
• Sustain student support
• Amend graduate contributions
• End contribution holidays
• Extend repayment period, 2535 years
• Exchequer loans, real rate of interest of 2%
Exchequer costs of HE
£bn
%
HEFCE T Grant (FT)
3.616
54
HEFCE T Grant (PT)
0.207
3
Grants to FT students
1.142
17
Loans to FT students
1.688
25
Grants to PT students
0.050
1
6.704
100
Total
Source London Economics/Million+
Resource Accounting and
Budgeting Charge
Loan Subsidy
Nominal loan value BIS does not expect to
be repaid in present value terms
London Economics 26.9%
ie £269 written off in every £1000 lost or
interest rate subsidy
Scenario
– increase fee by £4,000
Fee £7,225 same criteria as present
Additional costs:
Cost to Exchequer
£1.121bn pa
Cost to Students/Graduates
less subsidy of loans
Net cost
£3.10bn pa
£1.40bn pa
£1.65bn pa
Part-timers severely disadvantaged
Scenario
– Fair Funding for All
Free at point of study to UG FT and PT
Equal access to student support FT and PT
‘Right to study’
Encourage participation
Paid by increasing 25 year repayment to 35
years cf Scotland
2% real rate of interest raises £1.09bn pa
Wider Challenges
Globalisation
Quality and standards
Demography
Demand
Postgraduate
Private Providers
New …streams
Efficiency
Effects of globalisation
• 19% FT students non-UK
• 42% new academic staff non-UK (HESA)
• TNE set to become dominant mode of
international education
• Curriculum consequences
• Financial implications
Quality and Standards
• The ‘UK brand’
• Need for plain English
• External Examiners
• Public Information
Demographic Decline UUK
2008
% Change
2005/06 to
2019/20
- 5.9
2005/06 to
2026/27
+ 0.8
England
- 4.8
+ 2.7
Wales
- 8.5
- 4.9
Scotland
- 10.9
- 8.4
NI
- 13.2
-13.2
UK
Demand
What are Universities for?
Leitch targets
NINJA
‘New industries’ e.g. creative industries
Life long Learning
Postgraduates
Undergraduate
Postgraduate
1997-98
2008-09
% change
1997-98
2008-09
% change
Total
1,412,545
1,795,650
27%
347,005
472,415
36%
UK
1,281,240
1,606,525
25%
277,350
315,335
14%
EU
69,010
80,015
16%
23,840
40,255
69%
Non-EU
62,300
109,110
75%
45,815
116,825
155%
Full-time
1,022,605
1,266,500
24%
143,520
236,800
65%
Part-time
389,940
529,150
36%
203,485
235,615
16%
Postgraduates ‘One Step Beyond’
• Promotion
• Extend NSS
• Employability Competences
• RDS grant more focussed
• Link to Browne review
Private providers
• Growing
• For profit
• Not for profit
• Overseas providers
• Selected areas
• How can we defend?
• What can we learn?
Six main income streams
• Public research
• Private research
• Public teaching
• Private teaching
• Enterprise activity
• Other activities
Efficiency savings
Business process re-engineering
Flexible working
Shared services
When the wind of change is
blowing, the job of a University…