In the bleak midwinter

If universities were expecting a sack full of Christmas gifts from the minister in his speech at our THE Campus Live UK and Ireland event earlier this month, they were disappointed.

OK, none were expecting such a sack. But even so, Robert Halfon’s three-phase speech – part one an appreciation of his own university days, part two a brief acknowledgement of the tough financial conditions, part three a reprise of his core agenda of skills and degree apprenticeships, with a little scolding about the cost of foundation years – was notable in its lack of festive cheer.

It also included fierce criticism of what he said was “horrific” antisemitism on some campuses, following the 7 October Hamas attacks and subsequent Israeli invasion of Gaza.

Giveaways are off the table, then, which is news to no one. The truth is that as the country looks ahead to a likely Westminster election next year, the government is gearing up for its own Waterloo rather than worrying about higher education’s potential for financial meltdown.

Which is a huge problem, given the rumours that swirled at our event in Liverpool of an unnamed university being on the cusp of breaching banking covenants, or the painful clarity with which David Maguire – who was brought in as vice-chancellor to stabilise the financially stricken University of East Anglia earlier this year – set out the financial challenges facing the sector.

While none of the data Maguire presented in his conference session was new, the bleak picture it painted of a structurally insolvent sector was striking – in essence, every core area of activity bar international students is now loss-making, with growing numbers of institutions recording deficits on a three-year rolling basis. Look up the definition of “unsustainable” in the Oxford English Dictionary and that won’t be far off what you find.

If there is no hope of a financial resolution this side of the next general election, what about after it?

It was a question that bounced around the THE event like a rubber ball, never quite settling.

In one early session, Justine Greening, a former education secretary who now dedicates her time to championing social mobility, suggested that university finances were not an unsolvable conundrum.

Insisting that there was no need for another lengthy review in the mould of that led by Sir Philip Augar, Greening said: “I think we know what the answers probably are, and frankly we’ve probably wasted enough time.

“If you had asked [former universities minister] Jo Johnson and I, we could have told you most of what we needed Augar to come out with before he was set going. I think we’ve just got to crack on with this. It is delay that kills people’s faith in politics to drive change for the better.”

For Greening, the current system was “broken” in 2017, when the tuition fee cap was frozen, but she also argued that the system had always been “fragile” because it was inevitable that at some point fees would reach a level at which “debt aversion” would be triggered and social mobility harmed.

Her advice to the next government was to “keep the graduate contribution, make it more progressive, have it feed into a higher education fund akin to national insurance and probably reform the apprenticeship levy so it becomes a broader skills levy and employers can make a contribution – because they rely on graduates as much as they do apprentices.”

While Greening was adamant that a reformed, sustainable funding model was “more in reach than people realise”, others were far less sure – Maguire among them.

The current university business model in England is not sustainable beyond the next two or three years, he said.

“By that I mean continuing to perpetuate in-person teaching using a boarding-school model with very high staff-student ratios [SSRs]. So what we need to do is to do something different. We have to introduce alternative business models, and those that are able to evolve will survive.”

Others pointed to Australia as an example of a comparable system with much higher SSRs, offering one area for potential exploration.

Asked whether he felt there was any prospect of the next administration pulling a funding rabbit from the hat, Maguire replied: “All the conversations I’ve been involved in suggest that there’s not really any difference between the different parties’ short- to medium-term strategy.

“The idea that a change of government will change the funding envelope – I am not holding out for that. So no, I think we’ve got to work this out ourselves.”

If that’s an unfestive message, then I am afraid that reflects unfestive times – at least as far as higher education policy is concerned.

For everything else, and from everyone at THE, best wishes for a very happy Christmas.

john.gill@timeshighereducation.com