Universities look into the future
The current funding crisis will transform Britain’s universities by 2020.
University campuses will be unrecognisable.
The conventional image of today, which is still fondly perpetuated in the media, is already as antiquated as college scarves and sherry with the tutor.
The 18-year-old school leaver, living on campus, studying full-time for a purely academic, three-year undergraduate degree is fast becoming a minority species.
The current financial squeeze, which is set to continue for the next decade, will accelerate a transformation that has begun in many universities.
Already more than one in three students studies part-time and one in six is from overseas.
The BBC News website is looking at the challenges facing higher education in the UK in a series of articles.
There will be more mature students, more studying part-time, more living in their own or their parents’ homes, and many more studying online.
There will be more tailor-made vocational courses, operated in partnership with individual companies and employers.
There will be more pick-and-mix degrees, with students accumulating course credits at different universities, even across different countries, and with gaps for employment in between.
Students will increasingly become consumers as we reach the tipping-point where their contribution to the cost of the degree is greater than that made by the government.
Private providers will take over an increasing share of the university market.
The all-round university will increasingly lose out to more specialised institutions.
Finally, universities will become more global.
A few may be allowed to go to the wall.
The most successful British universities will take in even more overseas students.
They will also run more courses based in other countries, either on their own foreign campuses or through partnerships with overseas providers.
Others, though, may start to lose out to the strong competition of overseas students from the US, Australia and, increasingly, from continental Europe.
With income from both overseas students and from government grants being squeezed, some universities will be forced to merge to survive.
A few may be allowed to go to the wall.
If some of this sounds far-fetched, then consider the facts.
The head of Universities UK, Professor Steve Smith, warns the sector faces an extraordinarily bumpy financial future .
‘Running on empty’
As he points out, the UK is cutting investment in universities just as other countries – the US, France, India and China – are spending more and expanding fast.
The latest modelling from the Institute for Fiscal Studies predicts there will be no more real terms increases in university funding in England before 2018.
That is a worse settlement than under Margaret Thatcher, when overall public spending on universities rose in real terms in every year bar one – though spending per student fell sharply.
According to a study by accountants Grant Thornton for Times Higher Education, one university in five was already in deficit by 2009, before the cuts began.
The average surplus held by universities is just 1.4% of total income. That is half the 3% recommended by the funding council.
In other words, much of the higher education system is already running on empty.
Consider too, that although universities are looking to other sources of income, they rely on the government for 60% of their income.
There is a long way to go before they can escape the problems of the national budget deficit.
So what are the prospects for universities? Many are holding out for the cap on student fees to be lifted.
But the independent review of student finance, led by Lord Browne, will not even report until the end of this year.
Whoever is in government by then, will need time to produce a response, to publish a White Paper, and eventually pass legislation.
If we have a hung parliament, the next government will be very wary of taking the unpopular move of raising tuition fees.