The future size and shape of HE - Universities UK

3Methodological approach52 Our approach has had three main elements:p an analysis of demographic change over thenext twenty years for the UK and the EUpresented in our first report, to include anassessment of how the sector might respond todemographic decline in the numbers of 18- to20-year-olds and of the degree of uncertainty inthe projections arising from uncertaintiesabout rates of net inward migration;p uncertainties in demand arising from theimpact of current participation trends andfrom relevant public policies; andp the development of scenarios for highereducation in 2027- there were two stages inthe development of these scenarios:p a series of three seminars based on adetailed analysis of three key drivers of thehigher education system (funding,competition and employer engagement); andp an externally facilitated scenario planningevent.Why simple forecasting is not a realisticapproach53 The experience of the last twenty years showswhy it is so difficult to forecast developments sofar ahead. In 1987 demographic decline of 18- to20-year-olds was, as now, about to hit the sector.However, a combination of factors served insteadto produce a very rapid expansion at least up untilthe mid-1990s particularly in full-timeundergraduate numbers. These factors included:p the introduction of a common qualification at16+ (GCSE) leading to increased staying on ineducation beyond the age of 16 in England andWales;p the desire on the part of the National HealthService that new entrants to nursing and otherprofessions allied to medicine should beexpected to gain an initial higher educationqualification and to enter into partnership withhigher education institutions to deliver thisrequirement;p a significant change in the expectations ofyoung women and their families that theywould participate in higher education(partially fuelled by the developments in nurseeducation);p the introduction of a public funding method forfull-time undergraduates that provided a realincentive to institutions to recruit additionalstudents, taken up mainly by the newlyindependent polytechnics and colleges.54 Thereafter, as these changes worked through,demand levelled off again.55 There were also significant concerns twenty yearsago on two other areas of policy development:p the possible reduction in demand fromstudents from lower income families if aportion of student maintenance support wereto be in the form of a loan rather than a grant;p the dilution of research funding for traditionaluniversities from the extension of theresearch assessment exercise to coverresearch activity in the polytechnics andhigher education colleges.56 In the event, both concerns proved unfounded.57 The extension of a university title to a largenumber of institutions and the recent rapidgrowth in international student numbers werenot foreseen.58 While some of these changes have presentedreal opportunities for the sector they have notbeen without their difficulties: institutions havesought to operate at a substantially higher levelof activity with declining levels of public fundingper student for much of the period and modestlevels of public investment in the highereducation infrastructure.59 Apart from the obvious point that theenvironment in which institutions operate canand sometimes does change very rapidly, theexperience of the last twenty years suggests thatthe most important factor is how well placedthey are to recognise the potential threats andopportunities posed by such changes and howthey respond in order to grasp the opportunitiesand manage the threats.60 It is for this reason that scenarios which identifya small number of relatively unlikely changeswhich, were they to happen, would have a highimpact, are important. They provide a tool whichthe sector – and individual institutions – can useto assess how such changes would impinge onthem and how they could better positionthemselves to be able to access theopportunities and manage potential threats fromsuch changes as they develop.61 The simple forecasting approach, which appliescurrent trends, including demography, to thebaseline position is not appropriate because itfails to take account over the longer term ofmajor drivers of demand leading to unforeseendevelopments. Looking forward from theposition of the sector in 1987 towards thepresent day provides ample evidence of this.16