16th April 2014

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Court circular Karel Thomas

Congratulations to Julie Waterfield, formerly Director of Financial Planning at Durham who takes up her new post as Finance Director of the Royal Veterinary College this week. We wish Julie all the best in her new role.

The regular moves in the sector create interim opportunities, which often come to our attention here at the BUFDG office. If you're available and interested in interim work then please let Karel know.   

Finally, we wish all our members a happy (and sunny) Easter!

BUFDG Annual Conference 2014 highlights Dan Wake

Last week's Annual Conference was a great success, with Martyn Riddleston and his conference team inviting 250 delegates to the fantastic surroundings of the University of Leicester. We'll be making presentations and other conference materials and photos available over the coming weeks, but for now here's a round-up in video form:

2014 trends in higher education Dan Wake

HEFCE has updated analysis of some of the main trends and changes affecting higher education in England up to 2014. Findings include:

  • Numbers of full-time undergraduate entrants increased to 378,000 in 2013-14, up 8% from 2012-2013. However, numbers of part-time undergraduate entrants have decreased 46% since 2010-11, and there has been an overall decrease in undergraduate entrants that aren’t taking first degrees (e.g. foundation degrees).
  • While non-EU undergraduate student numbers are increasing, growth has slowed since 2010-11. Overall full-time international undergraduate student numbers (including other EU) have decreased (see page 7 of the HEFCE report on global demand.)
  • The number of UK/other EU students studying full-time postgraduate taught courses increased 2% (~1,000 entrants) from 2012-13. Part-time entry figures decreased (down 2% from 2012-13) but at a slower rate than previous years.
  • Improvements to widening participation continue, but “the absolute disparities between advantaged and disadvantaged areas remain large”.
  • The number of accepted applications to full-time STEM undergraduate courses reached record levels (nearly 98,000). However, there was a decrease in the number of entrants to full-time first-degree modern foreign language courses.
  • Knowledge exchange between universities and businesses is high, as is the international impact of UK research.

In terms of financial trends, the overall financial health of English HEIs is said to be “good”, but projected performance is weaker than the last 3 years’ actual performance. Tuition fees income from non-EU students in 2013 reached £3 billion - 30% of all tuition fee and education contract income. Finally, there is a planned investment of “over £3.3 billion in infrastructure projects per year during the next 3 years” - an average increase of 30% from the years 2010-11 to 2012-13.

Reaction to the figures has been mixed. Million + group welcomed the recovery in application numbers, but expressed concerns about the “significant drops in part-time and postgraduate study”. The Times Higher highlighted the report’s notes that expanding universities “tended to be those where students have high average [entry] tariff scores, or tend to be specialist institutions” and this trend is reversed for universities with “low or medium average scores”. 

Website survey - tell us what you think Dominic Fryer

A big part of my (Dominic's) role as Operations Manager is to look after the website and in my first 3 months in post I have had the opportunity to speak to some of you about the BUFDG site. What I would like to do now is to open this up to all members and ask you for your thoughts and experiences.

The current BUFDG website will be 18 months old this summer and although it is still a relatively new site, we are always looking to find ways we can improve it. We have set up this short survey which will tell us which sections you like, and also help us identify the areas that we need to improve on. Your responses will help shape our priorities for short term developments as well as our longer-term digital strategy. Please click here to complete the survey, it will close on 12th May 2014. If you have any questions, please email Dominic or call the office on 08452 415449.

Sustainability of the new system Matt Sisson

An article by sector commentator Andrew McGettigan in The Arena magazine this week looks at the financialisation of the HE sector in relation to competition and the student loans system. He identifies that HE policy is now ‘dominated’ by the issue of student loans, and that the “decidedly shaky” accounting basis of the new system has sown the seeds of breakdown of the unitary funding and regulatory model, in place since the early 1990s.

According to McGettigan, “the new scheme is only modelled to reach steady state—when annual loan outlay is matched by annual graduate repayments—sometime around 2035. By this point …government borrowing needed to frontload the scheme will have crossed £100 billion”. In addition, this state of affairs is based on a series of “contentious” assumptions, including that the economy will recover such that graduate earnings consistently outstrip inflation by 2% each year, where instead the Complete University Guide shows that graduate salaries have fallen by 11% over the last 5 years. In addition, the “putative ability to sell loans as financial assets to third parties…. - an essential part of the transition to the new funding regime” is being undermined by the increasing levels of risk associated with repayments in the new system. He notes the “air of confusion” hanging over the sector.

This message is reinforced by recent figures from the Institute of Fiscal Studies that show that average student debt on graduation under the new system will be more than £44,000. The report finds that under the previous system nearly half of graduates “would have repaid their debt in full by the age of 40”, yet under the new system, only 5% will do so. Almost three-quarters of graduates will not earn enough to pay back their loans, with the average debt remaining to be written off standing at £30,000. The Times Higher has a good summary of the report here.  

McGettigan believes that ultimately the system is unsustainable, and will need to be changed again. Yet we are unlikely to see a return to lower fees, as Labour have suggested, as the election is likely to be fought on issues of Macroeconomic competence. Read the article, and his conclusions in full here. For another good comparison of the costs for graduates of the ‘old’ versus ‘new’ systems, read John McDermott in the Financial Times.

A HE market "is not going to happen" Matt Sisson

In a related article, Simon Marginson, professor of international HE at the Institute of Education, questions whether there ever could be a real market in higher education, and argues that there are limits to commercialisation processes. Whilst clearly focused on England, it has interesting insights that relate to HE trends generally. Despite “three decades of talk”, he believes UK HE is no closer to a “genuine capitalist market powered by the profit motive”. Such a situation is impossible, not because of the political obstacles, but because of “the intrinsic social nature of the ‘goods’ in HE”. Maggie McGrath explains this to Forbes - some university offerings, including a “strong alumni network” or “happiness of the students who are enrolled,” are not always easy to calculate “in the same way you would a price”. Marginson elaborates:

“In economic terms, higher education produces status goods – student places and degrees associated with desired personal attributes and social outcomes. Social status cannot be infinitely expanded without changing its nature. …Likewise, consumer power cannot truly govern selective universities. They remain producer controlled. As the disgruntled consumer walks out of the door, she or he passes a queue of others waiting to enter. …Nor can university research be fully commercialised without losing the basic curiosity-driven programmes of enquiry that are both integral to economic innovation in industry, and underpin the social status of the leading higher education institutions. All over the world, basic research is largely sustained by governments or philanthropy, not markets”.

Marginson suggests this is why “no government anywhere has introduced a full-blown capitalist market”, and why in the US “universities depart from capitalism at every turn”.   

Developing an international strategy Dan Wake

The International Association of Universities (IAU) has published the results of its latest Global Survey, which revealed that 75% of HEIs either have an internationalization policy strategy or are preparing one. However, only 16% of the 1,336 responding institutions have internationalisation embedded in their overall institutional strategies. Professor Nigel Healy, Pro-Vice Chancellor of Nottingham Trent University, told delegates at the International Higher Education summit that international strategies need to form part of overall institutional goals if universities are to equip students to be “global citizens and to be employable in the globalized labour market.”

Another reason is for institutions to remain competitive, according to Simon Marginson, Director of Higher Education at the Institute of Education. He told the International Unit, “The UK's position in the international student market remains strong but could be undone by a combination of factors: improving higher education in the rest of the world, an unsympathetic visa regime and uncompetitive post-study work rights in the UK, and insular confidence that global English [language] and the attractions of London allow us to continue business as usual without adjusting educational programs or student welfare to the international students in our midst.” 

Finally, Ross Hudson, author of the aforementioned Global Survey report, told the International Unit that international collaborations also allow institutions to “share financial and other burdens” and produce “higher quality research”. A recent Universities UK report also shows the significant economic contribution of internationalisation:

For more information, please read the latest International Unit Newsletter.

And there's more Dan Wake

Jisc has been writing to you and your university to consider becoming a member of its VAT cost sharing group and consequently become an institutional member of Jisc. By becoming a member of its VAT cost sharing group it means universities can save up to 20% VAT on the Jisc membership and the majority of their Jisc services. There is more information on both Jisc’s VAT cost sharing group and its services.  If you have any questions Jisc can be contacted on membership@jisc.ac.uk.

Toni Pearce has been re-elected as the president of the National Union of Students.

PwC has written about information systems and technology challenges for higher education institutions.

A recent online discussion hosted by the Guardian has offered 5 tips on the qualities required for university leaders to be effective. This include communicating a clear vision, trusting staff, being fair, appointing good people and valuing all staff.

Amir M Sharif, assistant head at Brunel Business School, talks to University Business about the need for universities to “balance the principles upon which it provides access to higher education against how it realises income.”

This year’s EAUC Annual Conference will include a keynote on “embedding sustainability across the university: strategies and challenges,” as well as a panel session about who has the sustainability mandate in HEis. The deadline for bookings is 23rd April.

The National Centre for Universities and Businesses has released its first report on university and business collaboration, containing expert views and lots of case studies. 

Dr. Wendy Phillips told the Leadership Foundation for Higher Education about some of the findings of UWE’s strategic sourcing project: “We found that UK HEIs are only just beginning to discover the untapped benefits of implementing new business models with external partners”. The Efficiency Exchange is holding a conference about new perspectives on shared services on Wednesday 14th May 2014.

Finally, the BUFDG Job of the Week is Head of Financial Performance and Analysis at St. George's, University of London. More vacancies can be found on the BUFDG Jobs Page.