The Headlines
Transformation & Efficiency in the UK
As the British government recommits to research funding in the short term, the sector is expected to boost its outcomes. What’s in store for UK higher ed?
By John O’Leary
"A more educated society is happier, healthier, more cohesive, and socially and culturally richer."
Universities in many parts of the world are facing financial and political pressures in straitened post-pandemic times. In the UK, where higher education received mixed messages about its prospects in the government spending review in June, university leaders are trying to get ahead of the game by creating their own transformation and efficiency plans.
There was relief – if not wholesale celebrations – at the spending review’s pledge to maintain research funding at its current level in real terms for the next four years. Rachel Reeves, the Chancellor of the Exchequer, claimed that the £86 billion budget would boost Britain’s world-leading status in research and innovation and “turbo-charge our fastest growing sectors, from tech and life sciences, to advanced manufacturing and defence”.
The research strategy will transfer some funding to local control. Nearly £5 million is being invested to kickstart a new partnership between the high-growth regions of Manchester and Cambridge, strengthening the link between them to attract more business investment, and pilot new approaches to collaboration.
The Cambridge x Manchester Innovation Partnership includes a £4.8 million investment over three years which is intended to embed “place-based growth”, led by the universities of Cambridge and Manchester.
Bridget Phillipson, the Education Secretary, has been more positive than her Conservative predecessors about universities, saying in a letter to vice chancellors: “The institutions which you lead make a vital contribution, as education and research institutions, to our economy, to society and to industry and innovation. They contribute to productivity growth; play a crucial civic role in their communities; and have a key role to play in enhancing the UK’s reputation across the globe.
“I also passionately believe in education for education’s sake: a more educated society is happier, healthier, more cohesive, and socially and culturally richer.”
However, broader university budgets, especially for teaching, were conspicuous by their absence from the Chancellor’s statement. Government proposals for the reform of higher education are due later in the year, with access, economic growth, civic and regional engagement, quality and efficiency as the stated priorities.
But schools accounted for almost all of the latest increased funding for education beyond the boost for research. The promise of more courses in artificial intelligence was almost the only other reference to universities.
Vivienne Stern, Chief Executive of Universities UK (UUK), says: “The spending review has cemented the importance of R&D funding to national growth, but this must translate into support for universities more generally if they are to ensure their stability in extremely difficult circumstances.
“Universities can go even further in driving economic growth and expanding opportunity, and we look forward to working with government to achieve the sustainable funding settlement that requires.”
UUK hopes that by addressing some of the government’s concerns themselves, it may improve the chances of sympathetic treatment as well as producing much-needed economies. A number of institutions are already in a parlous state, many closing courses and laying off staff in response to falling recruitment of international students, whose fees have been a lifeline in recent years.
The Transformation and Efficiency Taskforce has already produced its first report, which demonstrated the need for action. A survey of UUK members found that almost nine out of 10 expected to face course closures in the next three years, while eight out of 10 thought they may have to reduce research activity over the same period. Most had delayed infrastructure projects, and a quarter had already declared compulsory redundancies.
Sir Nigel Carrington, a former Vice Chancellor of the University of the Arts London, who once ran the McLaren motor company, was chosen to chair the taskforce. “I have been struck by the considerable and genuine appetite across the sector to think and work differently to protect what is great about our world-leading universities and to deliver even better value for money to students and taxpayers,” he says.
“Our report describes further efficiencies that are achievable under the sector’s own steam, but also identifies elements of the higher education system that urgently require attention if genuine transformation is to take place.”
The introduction to the report echoes the government’s priorities. “The UK’s universities matter now more than ever,” it says. “They are integral to the prosperity of their local communities, regions, the UK and to the global community. They drive economic growth, equip graduates with opportunities for a more prosperous life, help solve some of the most fundamental challenges of our age, and drive social mobility across the country.
“Yet, the UK higher education sector stands at a critical point. Rising costs and real-terms reductions in their income streams have left universities under severe financial pressure. Universities have responded to the pressure – they have found ways to continue to deliver life-changing education and world-changing research with less. But continued pressure may risk impacting universities’ capacity to deliver prosperity, and their ability to support the government’s ambitions for growth, technology and skills development. “
Calling for a “fundamental shift in thinking” in universities and government, the taskforce sets out an agenda for institutions to work together more closely in the national interest as well as their own. Its initial seven-point plan covers:
- Pursuing innovative collaborative structures
- Sharing more services and infrastructure
- Using economies of scale and sector buying power
- Supporting digital transformation
- Adopting a common approach to assessing efficiency and benchmarking costs
- Evolving leadership and governance
- Creating the right policy and regulatory environment that helps universities go further, faster
A second phase, to be led by UUK, will focus on continuing to be the catalyst for further efficiencies through advice, guidance and sector resources; building consensus and momentum for transformation in specific areas of activity; securing action from government and sector partners to enable change; and creating an oversight group to lead on monitoring and accountability for the actions agreed following the report.
The taskforce does not rule out mergers. Indeed, it plans to publish guidance on possible models for amalgamation between universities and with other types of institution. But it warns: “There was widespread appetite among interviewees to explore new, closer ways of working together, up to and including full merger. However, many pointed out that mergers are complex, expensive and unlikely to be a short-term solution to immediate financial pressures.”
Case studies in the report outline successful examples of collaboration mainly below, but also including, the level of merger. Interviews by the taskforce suggest a greater willingness than ever before to move from the era of all-out competition, although it remains to be seen how many will make the leap.