A Perspective on the Challenges Facing Higher Education

Professor Les Ebdon CBE Vice Chancellor, University of Bedfordshire

Funding

Golden StateAge Universities

Government GovernmentAided Molested

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, 2535 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

Total 6.704 100

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 £3.10bn pa less subsidy of loans £1.40bn pa Net cost £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

2005/06 to 2026/27

UK - 5.9 + 0.8

England - 4.8 + 2.7

Wales - 8.5 - 4.9

Scotland - 10.9 - 8.4

NI - 13.2 -13.2

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…