Next government must ‘prioritise’ new HE law, says Hefce

The Higher Education Funding Council sets out its case for legislation – including on what happens when a provider “leaves” the higher education system – in its new business plan, which also pledges to pilot “new approaches to measure students’ learning”.

Meanwhile, Hefce has also released an analysis of universities’ financial forecasts for the period up to 2016-17, warning that the forecast for liquid funds to diminish while borrowing hits record levels is “an unsustainable trajectory”.

The report on finances also notes that England’s sector is projecting that fee income from non-European Union students will grow by 8.6 per cent a year – despite a “slowdown in the growth of international full-time undergraduate entrant numbers in 2012-13” .

Hefce’s draft business plan for 2015-20, titled Creating and sustaining the conditions for a world-leading higher education system, discusses the funding council’s recent decision to put out to tender the work currently carried out by the Quality Assurance Agency.

Hefce says it “will be developing with government, the sector, and other partners the building blocks of a more comprehensive regulatory regime which better fits the new market context. This regime should be risk-based and proportionate. It should reduce any unnecessary bureaucratic burdens on providers while creating an environment that stimulates excellence, innovation and enhancement.”

In an apparent reference to the lack of regulatory protection for students at private providers, Hefce adds that the new framework “does need to provide the essential safeguards for all students which is currently lacking. We will look to the new government in 2015 to prioritise appropriate legislation, including the process by which providers can enter and leave the higher education system.”

The business plan also says that Hefce wants to “build better ways of capturing excellent educational outcomes, and of refining existing indicators of students’ learning experiences and progression to employment or further study. We will also pilot new approaches to measure students’ learning, and we will explore how we might measure any increases in their social capital and social agency.”

On finances, Hefce’s Financial health of the higher education sector: 2013-14 to 2016-17 forecasts says that forecast performance is “sound overall, with the sector forecasting continued surpluses and healthy reserve levels”.

But it adds that the “projected financial out-turn for the sector is weaker than the previous three years, with the sector expecting its liquid funds to diminish and its borrowing to increase to record levels – an unsustainable trajectory”.

Liquid funds – cash or assets that can be easily turned into cash – are projected to fall from £7.4 billion to £5.5 billion over the forecast period, while borrowing is forecast to rise from £6.2 billion to £8.3 billion.

On the forecast annual 8.6 per cent growth in non-EU fee income, Hefce says: “Overseas student data published by HESA earlier in the year indicated a slowdown in the growth of international full-time undergraduate entrant numbers in 2012-13 which, if it were to continue, would increase the risk of HEIs not delivering the level of growth projected in these forecasts. This would have a significant adverse impact on the sector’s income and surplus projections.”

john.morgan@tesglobal.com