2016 was bad but we need to brace for an even worse 2017

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2016 seems to have been a particularly ill-starred year. Whether it has been the Brexit vote or the election of Donald Trump or the deaths of well-loved celebrities such as Leonard Cohen and Victoria Wood, it is a year that will be remembered by some for a procession of bad news.

However, if you thought 2016 was difficult, then you are going to love 2017.

For those who work in UK universities, the New Year will bring the double whammy of the pilot round of the Teaching Excellence Framework (submissions are due at noon on January 26) and a consultation on the next Research Excellence Framework. The latter is supposed to be seeking ways to reduce the administrative burdens on institutions.

The results of the TEF should be known by the summer, bringing with it the news of whether your university has earned the designation of Gold, Silver or Bronze. According to the anonymised metrics published by HEFCE, only 16% of institutions currently qualify as de facto Gold (with three or more positive flags and no negative flags).

That means there will be much to play for in the drafting of institutional statements that will be going on over the mince pies and Brussels Sprouts this festive season. However, for several institutions, their metrics are such that no amount of rhetorical invention will save them from an award of Bronze.

Given that the TEF will allow all institutions to raise tuition fees with inflation, its main interest lies in the possibility of a marquee university finishing on the bottom rung.

Look out for newspaper features on ‘The Worst Teaching in Britain’ and ‘Students Ripped Off at Elite Unis’. They are unlikely to point out that TEF’s metrics are incapable of measuring teaching quality itself and are in fact a mechanism to control the outlay of the student loan book in the next fiscal period.

However, the TEF pilot is a giveaway to university finance directors, and so will be the least of our problems in 2017.

The REF is likely to have a much more significant impact on universities, not because there is more money attached to it (there is not) but for what the proposals on staff inclusion might mean for the academic workforce in UK universities.

In his independent review of the REF, Lord Stern recommended that all ‘research active’ staff should be submitted to give an accurate determination of research strength in institutions. Such a measure is designed ‘to stop game playing’. However, if this rule is introduced, it will lead to the game to end all games.

Universities UK and UCEA have been in discussion with HEFCE, pointing out that there are two possible and equally unwelcome outcomes to such a proposal. Either it will hand a permanent inbuilt advantage to certain institutions who already do well out of the REF, many of whom are the same universities identified in a recent report by The Guardian for their widespread use of precarious and teaching only contracts. Or, it will lead to an inevitable, sector-wide reclassification of acres of staff, removing research from their contracts.

The Stern review spoke hopefully of promoting synergies between teaching and research. However, abandoning the principle of selectivity will be a betrayal of the face to the REF’s raison d’être, to fund excellence wherever it is found. Alongside the demands of the TEF, it risks driving a wedge between teaching and research in UK institutions. This would be to warp permanently the very idea of what it means to be an academic in Britain.

Given the downsides of such a move, we might ask what problem it is trying to fix? Will it increase research excellence in UK universities, facilitating scientific discovery, social innovation and deeper human wisdom? This is unlikely. Will it result in the migration of research funding from new and modern universities to the privileged and elite? Could be.

However, the results of the next REF will not take effect until 2021 so, again, this is not our most immediate concern.

Universities are reporting a downturn in applications for the 2017 cycle, with some universities facing 20% or more falls including some Russell Group institutions. This cannot be explained alone by the demographic tapering of 19-year-olds across the UK.

The more likely explanation is that as a result of the removal of the student number cap, the easing of entry tariffs to maximise student recruitment is leading to violent uncertainty in admissions patterns. Students are being ‘sucked up the pipe’ to fund expansion at the top of the sector.

Bond sales and building programmes are being underwritten by increased undergraduate cohorts, with resultant consequences for others in the sector as well as local communities experiencing the precipitous influx of student numbers.

The recent HEFCE report on the financial wellbeing of the sector warned that the universal assumption about growth in student numbers was implausible. These UCAS figures are an early indication of the severe risks facing some when planned higher education provision is replaced by a version of the Hunger Games between providers.

At least one established provider is already scheduled for closure in 2017 as a result of the collapse in its traditional student intake.  Others will surely follow.  2017 may be the year the higher education sector, as we have known it begins to unravel.

But since most universities continue to sit on healthy reserves and enjoy good lines of credit, this will not be the worst thing that might happen.

The Higher Education and Research Bill will eventually be passed through parliament, removing system-wide safeguards, handing the government unprecedented powers over universities and opening up the sector to hedge-fund backed ‘challenger institutions’. It is a sign of how overwhelmed by the policy tsunami universities are at the moment that they are struggling to make scrutiny of the Bill a priority.

While HERB is also about regularising facts on the ground, the changes it will herald to the regulatory architecture will not come into effect until 31st March 2018. It is again not the worst thing that is going to happen next year.

We will need to wait and see if Theresa May’s government can trigger Article 50 in March 2017.  She has risked a great deal in an appeal to the Supreme Court, which has jurisdiction over all three legal systems of the UK.

If the court accepts the case made last week regarding the use of the royal prerogative at Westminster and the rights of the devolved administrations, then that timetable will surely be blown out of the water. This is now a far from a fanciful hypothesis.  Brexit might not be the worst thing that happens either.

January will see the inauguration of Donald Trump as 45th President of the United States. As an indication of how bad things might be, this is also unlikely to be the worst thing that will happen to UK academia.

The French Presidential election in April might be able to stake a claim on that dubious honour. After the events of this year, who could be reassured by polls that suggest Marine Le Pen will lose in the second round of voting?

One ought to be concerned both by the left’s ability to mobilise a vote against Le Pen in those circumstances (holding a clothespin to their noses, as they say in Paris) and by the incipient racism of the French middle class, finally given free reign by Europe’s tide of nativist populism. It will follow fast on expected advances made by Geert Wilder’s Freedom Party in the Dutch election in March.

Following the resignation of Matteo Renzi, Italy will be facing an election in which the Movimento 5 Stelle will seek a referendum on membership of the Eurozone. In France, a victorious President Le Pen will seek a plebiscite on membership of the EU itself.

The European Union may be able to survive an exit of the semi-detached British, but it could surely not endure the exit of the cornerstone of France. While many in UK academia, including myself, are continuing to make a case for salvaging the benefits of the UK’s relationship with Europe, come April it might all be a moot point. There may not be a European Union to cling on to for much longer.

It could be the combination of President Le Pen and President Trump that really defines 2017. Le Pen’s election would create a crisis across the European Union but Trump’s economic plans, if enacted, could tip it over the edge.

If Trump makes good on his proposal to invest 1 trillion dollars in real economy infrastructure, rather than place this ‘printed’ money on the balance sheets of banks, then the inevitable consequence will be rising interest rates in America. The Eurozone will be obliged to follow. This will lead to a fall in the price of European bonds and an increase in their yields.

Unlike in the UK and the US, most of these bonds in the Eurozone are held not by the central bank but on the asset registers of individual financial institutions. A collapse in the European bond market has been long awaited by many; the political circumstances of 2017 might finally be enough to set it off.

The outcome would be a banking collapse across the Eurozone that will make the troubles of Grexit or Brexit look like small change.

While Angela Merkel might still be expected to win the German Federal election in October 2017, under such circumstances one would not bet against the far-right AfD party making sizeable gains across the electoral map. All of this would be the backdrop to the UK’s possible Brexit negotiations and the representation of the interests of our universities within them.

In written evidence to the Commons Education Select Committee recently, Universities UK’s expressed a newfound optimism about the prospects for universities after Brexit. This might look like an unlikely volte-face, but they are to be congratulated: optimism might be a quality in short supply in 2017. And if Brexit means anything it means adherence to the Blackadder principle, that ‘a total pig-headed unwillingness to look facts in the face will see us through’.

2 thoughts on “2016 was bad but we need to brace for an even worse 2017”

  1. Professor John Preston says:

    A very interesting article. Worrying stuff and the sector does face a perfect storm for 2017. Certainly there will be a realignment. For universities at the lower end of the league tables there is going to be intense competition from new entrants.

    The article states that “At least one established provider is already scheduled for closure in 2017 as a result of the collapse in its traditional student intake.” Can the author reveal which established provider this is and possibly a link to the evidence on this? If it does happen it will be a test case of how things like asset stripping, mergers / takeovers, competition policy and public-private partnerships might work in the sector.

  2. Kevin Sanders says:

    Is it, perhaps, Heythrop College?

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