Financial pressures on English higher education are advancing far quicker than predicted, with the current system “unsustainable in any plausible funding model”, according to a report that urges the sector to prioritise differentiation to secure a viable future.
Cost inflation, shifting demand and volatility in international student numbers have combined to heap pressure on institutions, with tuition fee increases only raising a net £18 million as most of the gain has been wiped out by higher national insurance contributions.
This financial threat has combined with “fundamental questions” being posed by artificial intelligence (AI), shifting student expectations and a “legitimacy crisis” facing the sector at a time of “deep social division” to pose an existential threat to institutions, argues former Sheffield Hallam University vice-chancellor Chris Husbands in a paper published by the Higher Education Policy Institute (Hepi) on 23 July.
Moreover, “the government is unlikely to come to the rescue” when it comes to investment in the system, with universities needing to ask “hard questions” about their operating models, he writes.
The New Choices report updates modelling that Husbands carried out two years ago for an earlier Hepi paper that outlined four potential scenarios facing the sector.
