The future size and shape of HE - Universities UK

34 The third scenario, ‘employer-driven flexiblelearning’ is characterised by the comingtogether of a serious squeeze on funding forhigher education with increased regulation ofthe purposes of the public funding element; thefull development of technologically basedlearning through significant public and privateinvestment; and the triumph of employer-leddemand for part qualifications. It has thefollowing main features:p technologically-based and managed learningand the availability of a full credit andaccumulation system coupled with reductionsin public funding mean that most studentsstudy part-time on a virtual basis while theycontinue to work;p co-funding between the funding councils andemployers is a major funding route subject tosignificant regulation;p the distinction between full-time and parttimestudy for the purposes of student supporthas been abolished;p despite restrictions on public funding, fulltimeundergraduate study remains asignificant feature of the system; andp a much greater stratification of the highereducation sector than now.35 The opportunities and threats of this scenarioare:p the development of strategic alliances byinstitutions with groups of employers andtheir supply chains;p institutions establish themselves as majorregional providers through strategic allianceswith local further education colleges andsome private providers;p institutions develop partnerships with majorcommercial players to become leaders on thetechnologically-based learning field;p use of the credit accumulation and transfersystem and the wide availability oftechnologically based learning open up highereducation to a much wider group of people,including, in particular, older people;p private providers cherry-pick lucrativevocational provision;p the take over of failing institutions by theprivate sector;p extreme stratification of the higher educationsector leading to little opportunity forinstitutional development and reducedopportunities for many young people; andp increased employer support fails to matchreductions in public funding leading to suboptimalmergers, including with furthereducation colleges, and a loss of reputation forthe sector.Future size of the sector36 The analysis in this study leads to the conclusionthat the most vulnerable market segments arefull-time undergraduates and internationalstudents from outside the EU, especially underscenarios 2 and 3. This conclusion is ofparticular importance because very manyinstitutions depend for their financialsustainability on a combination of these twostudent markets.37 Part-time undergraduate and postgraduatetaught numbers on the other hand are expectedto increase in all the scenarios driven in part by amore helpful demography and at postgraduatelevel the increasing demand for people with thehighest level of skills by employers. Overallnumbers would be broadly similar on all threescenarios, but the mix between full-time andpart-time would shift substantially towards parttimeunder scenarios 2 and 3 in particular. Thiswould lead to a significant reduction in full-timeequivalent numbers. Furthermore, part-timenumbers do not always deliver the same pro rataincome as full-time students and have similarfixed costs. Replacement of full-time numbersby part-time numbers may not of itself help tosecure increased viability and, currently, mostpart-time provision is concentrated in arelatively few specialist part-time providers.Future shape of the sector38 In the development of the scenarios the futurepattern of higher education institutions wasidentified as a key uncertainty rather thansomething that simply emerged from theanalysis.39 Under scenario 1 the pattern of institutions wasseen as being largely as now, but with a reducednumber of institutions as some have been takenover or merged in the face of increasedcompetition. Scenario 1 also envisagesincreased transnational provision with overseasuniversities.12