I can't remember who it was who said that the most reliable estimate of the number of active students in a university came from the number of sausages consumed in the canteens.
A very useful and helpful summary of the financial context of U.K. higher education, Anthony. Many thanks for writing and sharing this.
One observation is that alongside staff costs being the most significant element of university expenditure, staff time is also the most valuable resource. However, I question whether our systems and approaches for academic workload planning are working effectively.
We definitely need some innovation in the delivery models. International PG market is struggling and students are not willing to pay the increased tuition fees. When we do international recruitment visits students ask what do they get for the higher fees they pay. International Universities opening campuses in India and TNE models are increasingly popular in China and elsewhere. The “show-and-tell” using slides days are gone and we need to be more interactive with the students through more practical sessions that aligns with practice showing real skills that can increase student employability. .
I spent years of my life trying to get colleagues to comprehend this. Thankfully, I’ve now put that thankless task behind me, but for anyone still struggling, this is an excellent summary.
Very recognizable, I fear ;-). One 'interesting' factor that in at least one other country complicates matters is that the funding from the government is not based on costs incurred (or better even 'costs to be incurred' in the next year(s)), but based on the amount of funding they 'want' to allocate to alle universities and then distribute this based on an 'allocation scheme' (determined 'ages ago') based on the relevant relative 'output' over the previous years, where the 'output' of a university (volume) relative to the 'output' of the other universities is used as a 'proxy' as basis for the actual allocation of funds.
When I started my university (actually polytechnic) degree in the mid-1970s, I believe around 15% of school leavers went into HE, and there were around 40 universities (maybe excluding polys). Now there are almost 3 million students enrolled in almost 300 HEIs. While I'm not arguing for massive reductions in HEIs or enrolments, it seems to me that somewhere in that process of huge upscaling, the business model of universities shifted to the fundamentally unsustainable model we see now.
I agree with your comment. I have tried quite hard to stay clear of policy prescriptions though I observe that some comments seem to assume I hold particular views.
There are a few positions I am already committed to: (1) I believe the increase in participation rates is a good thing; (2) I wish to see more differentiated HE system; (3) I think that consolidation in the sector is necessary.
We have sought to graft a democratised (mass) model of HE onto a narrowly elite system. We have very high expectations of what that system can deliver. That has financial implications.
Quite...without wishing to sound elitist, I feel that ending the binary divide back in the day has led to HEIs that might have been doing an excellent job of providing high-quality vocational training for specific and often local labour markets, then became universities with ambitions to do what long-established and relatively well-endowed universities had been doing for decades. Requiring all academics to become 'research active' and secure prestigeous grants has often deflected excellent teachers towards activities at which they will probably never succeed or excel. It has probably also seen newer universities spending increasing amounts on a new cadre of senior leaders/managers whose brief is to pursue these lofty ambitions, and, if I were being harsh, to move on before their futility was realised. Many arrive in Australia, where it seems we are prepared to pay even more than in the UK for these positions. I say all this as someone who has never worked beyond the lower/middle ranks of university leadership, so maybe it looks different from on high. So, let's have more differentiation and specialisation in the sector, and perhaps we might then see some more sustainable and varied business models.
The core issue with ‘research active’ is cultural: the vast majority of academics see themselves as generating (the most important) knowledge in their field, irrespective of whether that is true. As a result it is very difficult to allocate staff time efficiently to both teaching and research, since academics view teaching-focused roles, or even periods of a career that are teaching-intensive, as ‘second-class’.
It is probably easier to become truly excellent in teaching than in research, and if universities are willing to recognise this in promotion (as many are) then it might send a message that doing some occasional small-scale, modest research but staying on top (critically) of other research in your field and feeding this into your teaching is somethiong worth pursuing.
But there it is: the small scale research, or pedagogic research, we keep insisting on bringing research back in and as a result our claims that we truly value teaching rightly fall on deaf ears.
Teach. Get promoted for doing it and organising it. You don’t have to attend meetings about REF. Or impact. Or grant capture.
And for some colleagues that will also mean research. Nothing else. You might be crap at teaching, the students may hate you, but no matter how much it affirms your relevance we really don’t need you to do it, thank you. Do the grants, do the outputs.
You need this basic honesty at the level of a department or faculty: it’s a prerequisite for people being able to rub along and create an environment that’s well organised and intellectually stimulating for staff and students alike.
“operate an employer-sponsored trust occupational pension scheme” - probably best to clarify that it’s even more complex? Some unis in USS, post-92s in TPS and LGS, and most operate a local scheme for lower paid staff
As an FE head, I got about £3700 p.a. per student, who got 40 weeks of teaching of 24 hours per week. Undergrads get (on average) 30 weeks of 10 to 16 contact hours for over £9,000 p.a.
Genuine question, why are universities in crisis? Do the fees subsidise research? If so surely this is bad value for many students? (PS, great article)
PG and Overseas students fees hitherto subsidised research (and this yielded some value) but the surplus they provide must now be principally directed to the underfunding of UK students. University educational delivery is inefficient. We have a democratised system grafted onto an elite model. As the 'for profits' demonstrate it could be different but this entails significant systems change, different expectations, and investment that is not available in a heavily constrained system.
I’m wondering how much staff cost reduction could be achieved by giving up the QA managerial mindset. Those in the trenches of higher education waste countless hours in senseless bureaucratic carousels.
Surely "Only 'unregulated' fees (postgraduate and overseas) yield income" should be reworded as: Only unregulated fees (postgraduate and overseas) yield a surplus.
Surely "Because it takes at least three years for a cohort to graduate" does not apply to taught masters and other shorter programs.
And "Generalisations about the sector are rarely useful" needs qualification in a post comprised of generalisations.
I can't remember who it was who said that the most reliable estimate of the number of active students in a university came from the number of sausages consumed in the canteens.
A very useful and helpful summary of the financial context of U.K. higher education, Anthony. Many thanks for writing and sharing this.
One observation is that alongside staff costs being the most significant element of university expenditure, staff time is also the most valuable resource. However, I question whether our systems and approaches for academic workload planning are working effectively.
We definitely need some innovation in the delivery models. International PG market is struggling and students are not willing to pay the increased tuition fees. When we do international recruitment visits students ask what do they get for the higher fees they pay. International Universities opening campuses in India and TNE models are increasingly popular in China and elsewhere. The “show-and-tell” using slides days are gone and we need to be more interactive with the students through more practical sessions that aligns with practice showing real skills that can increase student employability. .
This straight forward analysis by someone who is actually running a big university is extremely valuable. Well done, Anthony!
I spent years of my life trying to get colleagues to comprehend this. Thankfully, I’ve now put that thankless task behind me, but for anyone still struggling, this is an excellent summary.
Very recognizable, I fear ;-). One 'interesting' factor that in at least one other country complicates matters is that the funding from the government is not based on costs incurred (or better even 'costs to be incurred' in the next year(s)), but based on the amount of funding they 'want' to allocate to alle universities and then distribute this based on an 'allocation scheme' (determined 'ages ago') based on the relevant relative 'output' over the previous years, where the 'output' of a university (volume) relative to the 'output' of the other universities is used as a 'proxy' as basis for the actual allocation of funds.
When I started my university (actually polytechnic) degree in the mid-1970s, I believe around 15% of school leavers went into HE, and there were around 40 universities (maybe excluding polys). Now there are almost 3 million students enrolled in almost 300 HEIs. While I'm not arguing for massive reductions in HEIs or enrolments, it seems to me that somewhere in that process of huge upscaling, the business model of universities shifted to the fundamentally unsustainable model we see now.
I agree with your comment. I have tried quite hard to stay clear of policy prescriptions though I observe that some comments seem to assume I hold particular views.
There are a few positions I am already committed to: (1) I believe the increase in participation rates is a good thing; (2) I wish to see more differentiated HE system; (3) I think that consolidation in the sector is necessary.
We have sought to graft a democratised (mass) model of HE onto a narrowly elite system. We have very high expectations of what that system can deliver. That has financial implications.
Quite...without wishing to sound elitist, I feel that ending the binary divide back in the day has led to HEIs that might have been doing an excellent job of providing high-quality vocational training for specific and often local labour markets, then became universities with ambitions to do what long-established and relatively well-endowed universities had been doing for decades. Requiring all academics to become 'research active' and secure prestigeous grants has often deflected excellent teachers towards activities at which they will probably never succeed or excel. It has probably also seen newer universities spending increasing amounts on a new cadre of senior leaders/managers whose brief is to pursue these lofty ambitions, and, if I were being harsh, to move on before their futility was realised. Many arrive in Australia, where it seems we are prepared to pay even more than in the UK for these positions. I say all this as someone who has never worked beyond the lower/middle ranks of university leadership, so maybe it looks different from on high. So, let's have more differentiation and specialisation in the sector, and perhaps we might then see some more sustainable and varied business models.
The core issue with ‘research active’ is cultural: the vast majority of academics see themselves as generating (the most important) knowledge in their field, irrespective of whether that is true. As a result it is very difficult to allocate staff time efficiently to both teaching and research, since academics view teaching-focused roles, or even periods of a career that are teaching-intensive, as ‘second-class’.
It is probably easier to become truly excellent in teaching than in research, and if universities are willing to recognise this in promotion (as many are) then it might send a message that doing some occasional small-scale, modest research but staying on top (critically) of other research in your field and feeding this into your teaching is somethiong worth pursuing.
But there it is: the small scale research, or pedagogic research, we keep insisting on bringing research back in and as a result our claims that we truly value teaching rightly fall on deaf ears.
Teach. Get promoted for doing it and organising it. You don’t have to attend meetings about REF. Or impact. Or grant capture.
And for some colleagues that will also mean research. Nothing else. You might be crap at teaching, the students may hate you, but no matter how much it affirms your relevance we really don’t need you to do it, thank you. Do the grants, do the outputs.
You need this basic honesty at the level of a department or faculty: it’s a prerequisite for people being able to rub along and create an environment that’s well organised and intellectually stimulating for staff and students alike.
“operate an employer-sponsored trust occupational pension scheme” - probably best to clarify that it’s even more complex? Some unis in USS, post-92s in TPS and LGS, and most operate a local scheme for lower paid staff
Yes, good point. One of a series of gross generalisations (there are others) intended to make the article comprehensible.
As an FE head, I got about £3700 p.a. per student, who got 40 weeks of teaching of 24 hours per week. Undergrads get (on average) 30 weeks of 10 to 16 contact hours for over £9,000 p.a.
Genuine question, why are universities in crisis? Do the fees subsidise research? If so surely this is bad value for many students? (PS, great article)
PG and Overseas students fees hitherto subsidised research (and this yielded some value) but the surplus they provide must now be principally directed to the underfunding of UK students. University educational delivery is inefficient. We have a democratised system grafted onto an elite model. As the 'for profits' demonstrate it could be different but this entails significant systems change, different expectations, and investment that is not available in a heavily constrained system.
This is a great summary - as an academic thinking what is the best thing one can do to strengthen financial viability?
Raheelah Ahmad
1. scale to secure investment capacity on narrow margin
2. rethink workforce composition
3. drive portfolio review to ensure offer meets market demand
4. focus on efficiency in educational delivery
I’m wondering how much staff cost reduction could be achieved by giving up the QA managerial mindset. Those in the trenches of higher education waste countless hours in senseless bureaucratic carousels.
a question for the regulator?
In Australia, about a quarter of university revenue comes from overseas students: https://www.education.gov.au/download/17857/finance-2022-financial-reports-higher-education-providers/37982/2022-university-finance-summary-information/pdf
Education is Australia’s 4th biggest export after coal, iron ore & natural gas.
Also: https://tempo.substack.com/p/the-ivory-tower-and-the-bone-machine
5th by export value in UK
However, in some countries, overseas universities are not able to repatriate any surplus/profit back home. Not sure how widespread this is.
Surely "Only 'unregulated' fees (postgraduate and overseas) yield income" should be reworded as: Only unregulated fees (postgraduate and overseas) yield a surplus.
Surely "Because it takes at least three years for a cohort to graduate" does not apply to taught masters and other shorter programs.
And "Generalisations about the sector are rarely useful" needs qualification in a post comprised of generalisations.
Yes. Should perhaps be net income. Yes PG can be shifted more quickly. The other observation can perhaps be viewed as tongue in cheek!