A rocky road ahead…

    “Times of unprecedented change”

    “Challenging economic climate”

Looking back at a number of the reviews of the political landscape that I’ve written over the years, the two phrases above appear with almost monotonous regularity. And they are just as appropriate today as they have been in previous years. However, what is new is that before both the direction of change and the reasons for the economic challenges were known. The big difference today is that result of the referendum on 23 June has thrown uncertainty into the mix. Uncertainty, not just in the higher education sector, but across the whole country as the process to leave the EU begins.

The Government have sought to reduce some of the uncertainty by guaranteeing that EU students that are currently studying in the UK and those that will begin their courses in the coming years will continue to receive funding for the duration of their courses. Similar guarantees have been made for Horizon 2020 research funding. However, what is not clear is what the impact of Brexit will be on the future recruitment of students from the EU or on research funding. It is unlikely to be good news.

The current analysis is that the Government appears to be favouring a hard Brexit with tighter controls on immigration. The dominance of immigration as an issue in the referendum campaign and subsequent policy has been reflected in the statements from the Home Office suggesting further clampdowns on international students. Regardless of the actual policy that emerges, the rhetoric is damaging – a fall of 10% in the numbers of Indian students is evidence of that. It was not by accident that the Indian Prime Minister linked trade agreements with relaxation of visa requirements but although Theresa May stated that talented workers would be welcome, her response regarding students was lukewarm at best. It would appear that the lady is not for turning.

This is all set against the rather gloomy background of HEFCE’s assessment of the financial health of English universities released this week. The picture is likely to be similar in universities in the other countries of the UK. The forecast, made before the referendum, suggests falling levels of surpluses (and in some cases significant deficits), more borrowing and falling levels of cash reserves. The report notes that universities were looking for an increase of fee income from overseas students (of close to 30%), and for growth in home and EU students of over ten per cent by the 2018/19 session. In the current circumstances it is unlikely that either will materialise; a period of budgetary constraint will be the consequence. This will place an even greater emphasis on efficiencies and effective use of data in planning.

The Higher Education and Research Bill (HERB) is entering the Report stage before its third reading in the House of Commons. The Bill has seen a number of amendments as it has passed through the Committee stage but these have not radically changed the direction of the Bill. The Bill advocates the abolition of the English Funding Council (HEFCE) and the establishment of the Office for Students (OfS). The importance of the role HEFCE play in monitoring the financial health of the sector has been recognised in an amendment that proposes this role transfers to the OfS.

There is a great deal of focus on the Teaching Excellence Framework (TEF), particularly the link to fee increases. Although the TEF will initially apply to English universities, similar measures in the past have been adopted by the other countries in the UK so it would not be a surprise if in future years the TEF becomes applicable to all UK institutions.

The governance arrangements for higher education are also changing. In addition to HEFCE’s transformation into the Office for Students (and universities moving under the Department for Education), there are reports of the Welsh funding council being absorbed into a new Tertiary Education Authority and of the Scottish Funding Council being merged into a ‘super-quango’ with a number of other bodies. Both add to the uncertainty in the sector.

Finally one change that we do know about is that the UK will be implementing the EU General Data Protection Regulation before we leave the EU. Although much of the focus has been on the scale of the fines for breaches, GDPR represents an opportunity for organisations to improve their data and its management. UCISA has set up a website to highlight resources and activities that inform and support our members in their implementation of the Regulation.

There are difficult and challenging times ahead. Universities will need to make good use of the data they have to try and predict the effect of changes and plan accordingly. They will need be more agile to deal with the changes that are known as well as those that are yet to emerge. The sector has been resilient at times of uncertainty in the past and many will see opportunities to reshape their offering and operating model to adapt to the new environment. IT will be at the hub of that change.

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