Hepi report author says “unmanaged competition” has led to sector being “structurally starved into precarity”

UK higher education’s “onrushing insolvency” is not just a funding issue but a result of inherent flaws in the way the system is designed, according to a Higher Education Policy Institute report calling for an end to the “world-class university model”.

According to the report, the UK higher education sector’s focus on that model has resulted in “​​at most a quasi-market competition between institutions, ordered by calibration exercises like research assessment and university ranking”.

It calls for a redesign of the higher education system to encourage more group and collaborative approaches, the introduction of a transition fund to offer loans to providers to develop new business models, and the creation of a sector-wide leadership body responsible for overseeing resourcing of the tertiary education system.

The report, written by Edward Venning, a partner at Six Ravens Consulting, also says the new Labour government should task an independent commission to design universal provision into tertiary education.

“Higher education’s onrushing insolvency is not, as many would wish, merely a fixable fault in our funding model, caused by government backsliding on the tuition fee,” the paper states. “Instead, we have a system-design problem, in which funding problems are simply a characteristic, not a cause. What other sector would allow itself to stall in an era of surging demand, as our addressable market expands from young people to all adults?”

The report, Down with the World-Class University: How our business models damage universal higher education, highlights that the UK lags behind other advanced economies in tertiary enrolment rates, and says the sector can learn from emerging non-university competitors how to offer higher education at scale, in partnership and at lower cost.

“Above all…we should tackle this as a sector-wide exercise in system design,” it concludes. “Massification may have hit its high-water mark in the UK, because we chose the wrong design principle in unmanaged competition and the idea of students as self-interested actors. We must not make the same mistake in universal education.”

Keep the faith

Venning told Research Professional News that while his paper highlighted some shortcomings in UK higher education, he was “far from pessimistic”.

“The paper is intended to counter the spirit of declinism in the sector…and aim for growth,” he said. “University education remains the most effective response to a rapidly changing society and economy. That’s in large part why demand for tertiary education is expanding worldwide.”

He said his message to education secretary Bridget Phillipson would be to “keep faith with higher education”.

“It would be perverse to meet escalating demand by capping growth or closing providers,” he said. “Already, UK tertiary participation levels lag other advanced economies, with our regions and major disciplines hard hit.

“The government should not see higher education as a problem to be contained. Our sector has been structurally starved into precarity—financially and politically. If there is a university bankruptcy, this would be a political act amidst fairly spurious accusations of mismanagement and inefficiency.”

Venning added that there was a “big opportunity for Britain to be among the first countries to achieve universal [tertiary] provision”.

“It requires the sector to change massively and redefine the nature of education at this level,” he said. “It requires a system reset. Individual providers would need to behave very differently.”

Frances Corner, warden of Goldsmiths, University of London, which funded the research, said: “In the age of technology, we need more, not fewer, graduates equipped with advanced skills to solve complex problems.

“Structural reform of our sector is essential. We must innovate within the spirit of our rich educational heritage, equipping more people with the conceptual and practical tools required for growth, progress and social innovation.”