left to my own devices – occasional thoughts on higher education

Photo by Sebastian_Unrau from Freerange Stock

Around this time of year, there are a lot of posts and articles around of the ‘these are my predictions for the forthcoming year’ and/or, from the diligent, ‘these are my assessments of how accurate my predictions at the start of last year were’.

Whether it reflects my character, or my past training as a historian, I’ve never tended to do the ‘prediction thing’; and as a result have avoided the often humbling reflection on the ‘accuracy of my predictions’ thing.

This time last year, though, I did a variation on this with two posts on important questions for the sector in the 2025: one question for the government; and four questions for individual universities.  And while these aren’t really predictions, now seems like a good time to reflect on where we are with these.

the questions

The question that I posed that related to government, was whether the rhetoric about not stepping in should a higher education provider suffer financial collapse was really going to hold.  And the questions for universities, simplified a little, were essentially:

• Will the sector tackle directly the evident issues with sub-contracted provision?
• Can the extent of the cross-subsidisation of research activity by income from education continue?
• Can the cross-subsidisation between different academic disciplines that is almost, if not entirely, universal in our universities continue?
• Could the UK sector continue to maintain much lower Staff-Student Ratios than most other national higher education systems?

So five questions, all linked by the central challenge of how higher education would find its way out of the financial woods it had entered (to vary from the oft-used ‘storm’ metaphor).

signs of progress

None of the questions faced by universities have been fully answered.  I think, though, that the issues have been explicitly acknowledged by many, and there are signs of progress in engaging with and starting to address these.

While it’s taken far too long, OfS has finally begun to take action on the manifest issues that have arisen since the implementation of HERA in respect of sub-contracted provision, consulting on a new approach to this area.  As I say it’s late, and there are significant concerns with aspects of their proposed approach, but there is progress.

However, I framed this as a question for universities.  The issue of sub-contracting is primarily one for universities as autonomous degree awarding bodies, who should be exercising this privilege responsibly without the need for the sector’s headmaster to issue another set of rules and associated punishments if rules are breached.

The cause of the sub-contracting problem has been the failure of some universities to live up to their responsibilities.  Over the last year we have seen some of these universities start to step up to the mark: in one case as the result of regulatory intervention, but in another through the kind of responsible strategic choice we’d hope to see from universities.

There’s undoubtedly a way to go on this, not least given the rapidly increasing salience of this issue with the rush of UK universities to establish branch campuses offering various flavours of sub-contracted provision through TNE.  But nevertheless some progress in our universities stepping up to this challenge.

more signs of progress

On the other three questions for universities, it’s tempting to lean towards pessimism and scepticism but if we look more closely I think the situation is more positive.

Anton Muscatelli and Miles Padgett have recently written on WonkHE about the recognition of, and thinking about, the hard reality of the inability of education income to continue to fund research activity to the extent that it has; and the action needed to address this.  And although their post focused on the need for more progress and action, they do set out some of the ways in which steps towards addressing this are being taken.

Muscatelli and Padgett focus primarily on the sector level issues and actions needed.  But I think that there’s a further, institutional level to this that also indicates progress on this and the other two questions (cross-subsidisation; SSRs) I identified last year for universities.

further signs of progress

Not all, but most, of the sector has over the last year been implementing cost reduction programmes.  Many, if not most, have these have been significant in nature and scope.

Acknowledging the significant personal / institutional / regional / national impacts of these programmes, and without wanting to get into the issues of why universities are in this position or if this is the only way forward, it seems likely that the cost reduction programmes have been taken forward will have been informed by the types of issues I identified this time last year.

All decisions on cost saving programmes are informed by specific criteria, and talking about this with colleagues across the sector much of the time these have (explicitly or implicitly) included issues around SSR and cross-subsidy (both between education and research, and between disciplines as represented by academic units).

The way in, and extent to, which this has happened varies significantly between universities. – and observing specific univerisities from the outside it is difficult to determine either of these things.  But it does seem that it has been happening.

The process is far from complete, and the approach to doing this has been difficult for all those involved and affected and will remain so.  Consequently while universities are very far from out of these particular woods, they are at least seeking out and venturing along pathways that may lead them to a different place.

let’s not get carried away

It’s less easy to say that there has substantive progress on the question that I identified for government: whether a university would be allowed to close due to financial pressures it could not withstand.

When the Labour Party took office in summer 2024, the initial indications were that, perhaps with more regret than its predecessor, the new government would be willing to see the closure of universities in these circumstances.  Since then, there have been developments but it’s difficult to see this as representing significant, sufficient or adequate engagement with the issue.

Through the developments at Dundee we now have worked clarity now about how the SNP administration in Scotland will respond to the financial failures of a university.  It remains much more opaque in respect of England.

chimeras

When OfS’s most recent analysis of higher education providers’ finances was published in November last year, the news was unsurprisingly dark. The sector appeared to be going deeper into the woods, with a marked increase in the number of providers forecast to be in deficit by 2025-26.

The government’s response to this OfS report?  A DfE statement that ‘we have taken action to put the sector on a secure financial footing, including committing to raise the maximum cap on tuition fees annually’.

This ignored the fact that as Chris Husbands has recently written ‘the real-terms value of the base unit of resource for indexation is roughly the same as it was in 1998 when top-up fees were first introduced’.  It also paid no attention to the increase in the cap on the undergraduate home fee having been accompanied by other measures that raised more from universities through increased taxation than would be yielded by the rise in the home undergraduate fee.  On top of which the international student fee levy would remove further resource from the English higher education sector.

the claim

Unsurprisingly given its magical thinking on the impact of its decisions on higher education finance, the government is still being pressed on what it would do should a university financially collapse. And when this happened at the House of Commons Education Select Committee in late November Jacqui Smith said [Q96]:

While we would not intervene in the interests solely of protecting a provider, we would want to protect the interests of students, taxpayers and research. If a provider were at risk of unplanned closure, we would work with the OfS, we would work with the provider, and we would work with other Government Departments in order to ensure that students’ and taxpayers’ best interests were protected.

And then doubled down on the magical thinking about the increase in home undergraduate fees providing, and how this provided clarity for individual higher education providers to make strategic decisions.

the reality

So on the question I asked a year ago much remains unclear.

And while these are difficult and complex issues, much of this opacity is unnecessary. Over the last year we have had well-argued cases for a range of measures to prevent disorderly provider closure (e.g. the Public First report setting out proposals for a transformation scheme to support institutional transformation, and a clear special administration scheme to manage institutional closures should they be necessary). But the government has ignored such calls to date, and shows no sign of acting on this in the future.

And this matters. While of course we all hope this doesn’t happen, the Education Select Committee was told at a Chatham House session with providers in November that ‘one larger provider looks set to collapse this calendar year‘.

still in the woods, but moving

So progress on these questions over the last year is mixed. Which I suppose it was always going to be. The sector is deep in the financial woods, and determining and following a path through these is going to be a hugely challenging and long-term process.

And reflecting back, there is perhaps a further difference between the two groups of question I asked beyond their intended audience. The type of questions asked of universities are of the type that perhaps never have answers; the important thing is that we continue to ask ourselves these questions. The question for government, however, is one that can be answered and does need answering. And unfortunately I don’t think that’s any more likely in 2026, than proved to be the case in 2025.