Economic headwinds could force a reluctant Westminster government to attempt a much more radical reform of the English higher education sector than planned, with universities being warned that the price of stability will be institutional autonomy.
Leaders believe that the market-driven era that started with the introduction of ?9,000 fees in 2012 is all but over and the next six months will prove crucial in determining what will replace it.
While so far light on details, education secretary Bridget Phillipson has signalled that any future funding settlements will be conditional on reform – with universities likely to have to restructure themselves according to Labour’s vision, either out of want or necessity.
Shitij Kapur, the vice-chancellor of King’s College London who has become a?leading voice in the funding debate, has warned that without economic growth and a rebound in international student recruitment, widespread system change will be needed, led by the government.
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He told Times Higher Education that the market system – with a regulator providing guardrails – had allowed for remarkable growth in national and international students but this era may now have run its course. “We may need more than a market and a regulator. We may need a vision and a steward,” he said.
Jess Lister, associate director (education) at the consultancy Public First, said ministers will be reluctant to play this role, preferring instead to focus reforms on students while hoping institutions fix themselves, but could be left with no choice.
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“They are trying to tinker round the edges, but the economic forces in the sector mean they are going to have to get stuck in, bigger, harder and faster than they really want,” she said.
Institutions were not in a position to transform themselves so the government may have to pay them to do it, said Ms Lister, by providing funding contingent on doing specific things – for example, training more nurses.
“Labour places less value on institutional autonomy – it instinctively views universities as much more of a sort of public sector tool, even if they are not,” said Ms Lister.
“Universities have always been quite good at matching what their political masters want. But the step change we are going to see is that everything is going to be conditional on trading your autonomy.”
While there were unlikely to be punitive measures for providers that can survive without taking the money, Ms Lister said, “if you are an institution that is struggling, the offer that is going to be on the table for you is trading autonomy and competitive forces in exchange for aligning really closely to a government agenda”.
A new skills-focused class of institution that is primarily funded via government initiatives could emerge in the new system, said Ms Lister, and the universities making these big changes “might not be the ones we expect”.
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Professor Kapur agreed that the country needed a “spectrum” of universities, ranging from those vital for local prosperity and training the workforce, to internationally competitive institutions that push the boundaries of knowledge. But such a system needed to be “curated in the national interest”.
He said the government should articulate some broad principles but give universities the freedom to respond in an open consultation and then choose the best model, based on a competition of ideas, not ideology.
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“It needs to outline where we want to be and what are all the things we want the system to achieve. University systems are not created in one parliamentary term. It needs to be a 10-year plan,” he said.
With no more money or incentives, Professor Kapur said, “entirely market driven stratification” will force some universities to fail or merge. “Something will emerge – we will still be able to teach students – but it will be driven by a profit survival mode.”
Ewart Keep, emeritus professor of education, training and skills at the University of Oxford, said there was a “real vacuum” of ideas about what the future model for higher education could look like, and it was unlikely to be resolved by next summer – by which point the government is expected to have laid out more detail on its plans.
He agreed that any future fee rises or other funding requests would be tied to delivering things the government thinks are important.
Another message coming from ministers, according to Professor Keep, was that universities will be expected to “think about your future plans and finances in a slightly more cautious way” after a period characterised by rapid expansion.
“Government will emphasise that the gold rush is over, or at least it is a lot patchier than it was. And for some that means thinking about a different operating model and how you can cut your cloth according to the amount of money you are really going to get, not what you hope to get.”
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