The future size and shape of HE - Universities UK

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Scenario 2: market-driven and competitive34Assumptions152 As young people are required to stay in educationor training up to the age of 18 there is asignificant increase in the proportion of 18- to20-year-olds, especially boys, attracted to stay inlearning by the innovative application of digitaland communications technology, gaining level 3qualifications. Much of this increase is in theform of diplomas rather than A-levels.153 Employers, driven by the impact of demographicdecline between 2010 and 2020, recruit a higherproportion of 18- to 20-year-olds with level 3qualifications than now and fund part-timehigher education for these individuals. This,together with the increase in the numbers of 25-to 50-year-olds and of people aged over 60, leadsto a significant increase in the demand for parttimeundergraduate higher education.154 There is increased demand for postgraduatestudy (mainly part-time) to meet the increasingrequirement in many jobs for the highest level ofskills.155 After a short-term recession, economic growthis largely sustained across the period at the levelachieved in recent years. This is sufficient tosustain public funding for higher education atcurrent levels per student in real terms againstthe pressures for increased funding for servicesfor the ageing population and for increasednumbers of migrants. Fees are largelyderegulated but with a cap on the publiccontribution leading to a differentiated feesystem for full-time undergraduates in line withfees for other students.156 Government regulation is reduced and there is inplace a more open and liberal quality assuranceregime for taught provision. This together withemergence of market fees encourages morespecialist private providers to enter the market.The UK brand of higher education is, however,diminished as a result and overall internationaldemand falls except for the internationallyrecognised elite institutions.157 A universal (UK-wide) credit accumulation andtransfer system for undergraduate andpostgraduate qualifications is in place.Scenario 2: market-driven and competitive158 There is a more generally agreed and wellunderstoodcomplementary participation by theprincipal partners in higher education – thestate, higher education institutions, individuals,and employers than there is now:p state involvement being more stronglystrategic with public funding for highereducation targeted upon specific parts of thepopulation (Foundation awards, underrepresentedgroups, the unemployed, etc),particular subjects (especially those judged tobe of strategic importance or linked to publicsector employment) and changing needs ofthe national economy and with a cap on thelevel of public contribution to fees. Otherwiseless intervention and regulation than now;p highly innovative providers, including manymore private providers than there are now,with a greater awareness and commitment todevelop and exploit their particular strengthsand bring new products combining newtechnological approaches to enhance thestudent learning experience to new betterdefined market;p empowered individuals recognising their ownself-interest, embracing the new technologiesand accepting responsibility to achieve ‘lifeworth’ awards from credits acquired andfunded from a variety of different sources;p employers looking to satisfy their humanresource requirements according tocommercial priorities and with less regard tofinal awards, national boundaries andwhether the provider is public, private orjointly funded. Increased assumptions that itis the responsibility of individuals to ensuretheir own ‘employability’ but with anincreasing trend to pick people at the age of 18and manage and support their highereducation rather than wait until they graduate.159 Despite an economic slowdown in the short term,continuing strong economic growth in the latterpart of the period facilitates increased total(public plus private) investment in highereducation. Public investment, which comes understrong pressure from expenditure on the healthservice and services for the elderly moregenerally, is maintained at current levels perstudent. However, it is more targeted on enablingunder-represented groups to participate and onparticular courses, especially those seen as ofstrategic national importance, those leading tojobs in public sector professions and continuingprofessional development for those professionsand some postgraduate programmes.
160 Increased private contributions are requiredfrom full-time undergraduate students frommore well-off families through a differential feeregime that requires them to finance theelement of the fee above the public fee capwithout subsidised public loan support.Increased contributions are required also fromall graduates through charging a real rate ofinterest on publicly funded student loans.Nevertheless full-time undergraduate provisionremains the major part of the publicly fundedhigher education sector’s provision.161 By 2026, the higher education landscape looksquite different than it is now. It is a much moredifferentiated system driven by institutions’search for financial sustainability and the needto compete effectively with new entrants to themarket that are much fleeter of foot inresponding to new opportunities than highereducation institutions have traditionally been.Sharing some features with the current highereducation systems in the United States andAustralia but more diverse with UK publiclysupported higher education institutionsoperating in partnership with overseasuniversities or major private providers. Some ofthese partnerships will be with publishingcompanies able to make a major investment intothe development of e-learning. This enables thelarger institutions in particular to continue tocompete in the UK market and in the borderlesseducation market.162 This diversity will encompass the following:p a smaller number of institutions with widerangingdiverse missions which strive toincrease their size by acquisitions andmergers. Their aim is both to support theiroverhead costs and to enter new markets sothat this group of institutions may be, onaverage, 50 per cent larger than they are now;p a much larger number of small and mediumsized institutions that are specialist or operatein niche markets;p a much larger number of private providersthan now encouraged by a more liberal qualityassurance regime and the opportunity todemonstrate the feasibility of reducingdelivery costs without sacrificing quality forcertain aspects of teaching delivery. Most ofthese will be small to medium nicheproviders, but some may be offshoreoperations of overseas universities or largeborderless e-learning providers such as majorpublishing companies. Some of these privateproviders will be in partnership with publiclyfunded institutions and may gain access topublic funding.163 This differentiation within the sector leads to thedevelopment of two streams of academic staff:one undertaking research and teaching in thelarge broad mission institutions; the other insmall niche providers mainly undertakingteaching, both in publicly funded highereducation institutions and non-traditionalproviders.164 However, this increase in the diversity of thesector leads to a loss of the clear brand identityof UK higher education with some fall in demandfrom international students especially at thelower end of the market where mostopportunities for collaboration might arise. Onthe other hand, niche markets are exploited withthe result that there is greater diversity ofpostgraduate provision related to employmentneeds and, in particular, more shorterprogrammes and more part-time and e-learningstudy within a universal credit accumulation andtransfer system.Universities UK The future size and shape of HE 35
Page 5: Index of tables6 Table 1 Demographi
Page 8 and 9: 6 This analysis incorporates an ass
Page 10 and 11: Factoring in current trends and pol
Page 12 and 13: Table 2Key areas of uncertainty and
Page 14 and 15: 34 The third scenario, ‘employer-
Page 16 and 17: 1Introduction44 This is the second
Page 18 and 19: 3Methodological approach52 Our appr
Page 20 and 21: Table 4Demographic-based projection
Page 22 and 23: Sources of uncertainty74 There are
Page 24 and 25: Table 8Full-time undergraduateenrol
Page 26 and 27: 98 As these are all market-driven p
Page 28 and 29: 6Scenario planningIntroduction109 I
Page 30 and 31: 28119 For institutions the impact o
Page 32 and 33: 127 Twelve sets of issues were iden
Page 34 and 35: 32139 All the scenarios assume impl
Page 38 and 39: Scenario 3: employer-driven flexibl
Page 40 and 41: Comparing the scenarios176 In seeki
Page 42 and 43: Threats and opportunitiesScenario 1
Page 44 and 45: p extreme stratification of the hig
Page 46 and 47: 193 These assessments of the level
Page 48 and 49: 208 Home and EU part-time postgradu
Page 50 and 51: Table 17Summary of projectedinterna
Page 52 and 53: 10Institutions’ responses to the
Page 54 and 55: Notes1 As a starting point for the
Page 56: About Universities UKThis publicati

The future size and shape of HE - Universities UK

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