According to the Chinese zodiac, 2017 will be designated the year of the rooster.
Nothing could be more appropriate as a motif for the coming year for British higher education, for it will be when the plethora of troublesome chickens hatched in 2016 come home to roost.
Over the past 12 months, British universities have witnessed an unprecedented barrage of game-changing disruptions - the Brexit vote, the intrusions of the higher education and research bill, the teaching excellence framework, redoubled restrictions on international student visas, falling home and overseas student enrolments and the restructuring of research funding - not to mention the election of Donald Trump as president of the United States. The (mostly damaging) implications of all of this change has been analysed to death, while overlooking a common feature - none has happened yet.
This will be the year when universities start to experience the impacts of the political and policy agenda set in train during 2016. It is set be a difficult one for those running British universities, but paradoxically good for those looking to study with them. Student recruitment, and becoming smarter at attracting, retaining and earning a living from students of all kinds, will top the priorities of every university. The collapse in enrolments of older and part-time home students seen over recent years looks likely to be matched (albeit less dramatically) by declining demand from school-leavers, fuelled by a triple whammy of demographics, economics and attractive alternatives. In parallel, the hitherto reliable demand from international students (especially from China) is already flatlining and will probably fall in the wake of Brexit (for potential EU recruits) and off-putting visa restrictions (for everyone else).
Student recruitment in 2017 will be a fiercely-fought zero-sum game affecting every UK provider, with the effects felt hardest by the low-tariff institutions already struggling to make their planned undergraduate numbers and in the taught postgraduate programmes across the country that have long relied on non-UK recruits. The latest end-of-cycle report for 2016 from the Universities and Colleges Admissions Service (and the provisional data for 2017 applications) show that this is already happening. There is a clear “flight to quality” of student demand towards the higher-tariff institutions, facilitated by a marked relaxation of the A-level tariffs actually required by many Russell Group and other “selective” universities. The irony that some of the most prestigious institutions seem likely to score poorly in the teaching excellence framework will probably be lost on many prospective students (and their parents) for whom their perceived credentials trump their educational gains. Poor student satisfaction ratings have so far done little to depress demand.
In response to this testing outlook, 2017 should also be the year when university leaders get real. Despite the downward trend of almost every market indicator, significant numbers of vice-chancellors continue to forecast and plan for growth. In PA Consulting’s latest survey of higher education leaders, 42 per cent said they were planning for significant growth in home demand over coming years, with 56 per cent expressing similar expectations about international recruitment. The Higher Education Funding Council for England has warned that such unfounded projections are unsustainable and, for many institutions, illusory. Renewed speculation about institutional failures and shotgun mergers is likely as the year progresses and as the relatively strong providers scoop greater shares of the student recruitment and research grant pools at the expense of their weaker brethren.
This message should now be getting through and the new year resolutions of university leadership teams should be to get smarter in response to the new realities of higher education in 2017 and beyond. To do this, they will need to pursue four parallel routes.
First build their defences against the dark arts of the second round of the teaching excellence framework and related regulatory intrusions, recognising that the exercise presents no upsides and many serious downsides. The best outcomes, for the 30 per cent of institutions rated “gold”, will do no more than protect the current real terms value of the tuition fee cap and, if Home Office rumblings are true, allow continued recruitment of international students. Any other outcome - that is, for the remaining 70 per cent - will involve seeing tuition fees eroded by inflation, acquiring “official” second or third class status and (possibly) reduce the ability to recruit international students.
Second university leaders will need to battle to grow, or at least protect, current shares in shrinking markets for home and international student fees, with success only possible at the expense of others. This battle has already started, with many Russell Group and former 1994 Group universities securing as much as 30 per cent growth in undergraduate enrolments over the past year or two, at the direct expense of others lower down the institutional pecking order. The currency of this competition has been the entry grades accepted by the supposedly most selective institutions, which have been heavily discounted. This is forcing less competitive universities to substitute for the recruits thus lost by plundering from the foundation degrees and diploma programmes traditionally provided by further education and private colleges.
Third leaders will seek new business from growing markets for work-based learning, transnational education provision and online services. There are certainly grounds for optimism in each of these areas. The forthcoming apprenticeship levy on employers is expected to generate demand for tens of thousands of degree-level apprenticeships, potentially reinforced by additional funding for local skills development programmes from the long-awaited industrial strategy. Unsatisfied demand for good quality higher education from rising middle classes in countries with fast-growing economies continues to sustain strong demand for local delivery of Western provision, much of it online. Expect to see universities seeking inroads into these markets, where they will encounter strong and entrenched competitors; expect also a swathe of new strategic partnerships.
Finally universities will have to exploit the power of sophisticated data analytics to improve quality and effectiveness. They remain years behind other global businesses built on highly targeted, information-based relationships tailored to individual service users - essentially what higher education is about. Well-proven technologies already exist for highly cost-effective and personalised higher education relevant to today’s learning needs, and plenty of big name partners are keen to extend their insights into the sleepy world of universities. Look out for some interesting and potentially very important initiatives in this space.
These are the known-knowns of higher education in 2017. But where should readers look for this year’s black swans - the lurking shocks waiting to match Brexit, Trump or even just the overnight demise of the Cameron premiership? By definition these are unknowns. But don’t be too surprised if they prove to involve the Chinese rooster, asserting its role as the driving force of global 21st century higher education.
Mike Boxall is a higher education senior adviser to PA Consulting Group