It’s a particularly odd feature of the Westminster parliamentary system that no sooner has the post-election celebration champagne gone flat than the new government is suddenly responsible for running the country.
The civil service will have been working with the main parties on their manifesto policies and post-election plans in anticipation of being obliged to implement some of them right away, and Labour has already indicated that it plans to schedule a King’s Speech in mid-July and extend the current parliamentary session to be able to get moving on key pieces of legislation.
But whatever the aspiration for policy delivery in those early months, all incoming ministers will also be faced with a substantial in-tray of unresolved issues and hanging policy agendas that may require early decisions. Here are just some of the agendas and challenges that the new Labour administration will inherit for higher education.
University financial sustainability and student finance
For higher education the revelation from the FT in May that university failure had made Sue Gray’s “shitlist” of major challenges likely to hit the incoming government offered an odd sort of relief, in the sense that knowing that Labour appreciates the issue, even if it has not explicitly said what it might do about it.
In the absence of a fully worked up policy agenda for HE from Labour the question of the party’s response to the risk of institutional insolvency has been a major feature of the pre-election debate in the HE sector. On Wonkhe, Mark Leach speculated that Labour might put up fees to relieve the immediate pressures on the sector as a whole, and Debbie McVitty worked with colleagues at Mills & Reeve to set out an immediate plan of action to stabilise the handful of institutions that are now in some peril.
The other side of the university sustainability coin is of course the cost pressures on students which, if not addressed, will continue to drive a loss of engagement and learning and miserable student experiences for an increasingly large proportion of the student body. In the run up to the election Jim Dickinson shared research from our Belong student survey platform which exposed the impact of financial struggle across the whole experience. Uprating the maintenance loan allowance in real terms would offer some brief relief but the wider problem that the rising cost of participation continues to price out those without a ready supply of parental income, remains.
Research
Britain’s science base remains world-leading and R&D investment has increased under the Conservatives but crowding in additional private sector investment remains elusive. Labour will not cut headline research investment but for as long as the party retains its commitment to the fiscal straitjacket of Conservative spending plans, there is not much room for funding increase. Last year’s Nurse review of the research landscape left open the question of whether the sector would prefer to do fewer better funded programmes or maintain a broader portfolio where funding now falls well short of costs. If Labour does not wish to further explode the research deficit it is going to either have to fund less better, reprofile funding including looking at the effectiveness of QR, or effectively stimulate non-government research funding.
This could mean reassessing the impact of R&D tax credits as changes have mostly benefited the largest businesses, reassessing whether freeports and investment zones align with Labour’s planned industrial strategy, and putting some meat on the bones of its pro university spin-outs policy. UKRI’s new deal for postgraduates and the Tickell review of research bureaucracy remain live policy agendas that Labour will need to take a view on. And aside from Labour’s existing commitments on rolling out ten year budgets for research institutions, there is the small matter of strengthening the UK’s R&D EU and international relationships as Horizon Europe 2028 comes into view.
International students
The drop in international student numbers this year following changes to government policy on taught students bringing dependants and a review of the system from the Migration Advisory Committee has made what was already a tricky financial situation for universities much worse. More widely, the sense among international applicants that the UK is not an especially stable or friendly policy environment for international study may do more long term damage than the immediate impact of those policies.
The sector is optimistic that Labour will make a move to address the stability and friendliness issues in the first instance through some kind of early public statement that Britain is “open for business,” and that efforts will be made to woo international ambassadors from key countries such as India. There could be immediate benefits in contribution to the state of university finances and the broader contribution that international students make to GDP, but Labour could also be cautious about how a full-throated welcome for international students could play in its early months. In the medium term the sector will need to set out some assurances on sustainable international recruitment and there could be a refreshed international education strategy. But stopping the bleeding will be the first priority.
Mental health and student wellbeing
Nottingham Trent vice chancellor Edward Peck remains at the helm of a student mental health taskforce in DFE, with a brief to take forward specific work on student suicide prevention, and a more general guidance on good practice for institutions. Labour will need to decide whether to shut down the task force, support it to complete its brief, or amp it up. Despite being commissioned by Conservative higher education minister Robert Halfon the taskforce is not especially aligned to any political party’s agenda, and so to cancel it, especially on such a sensitive topic, would be a bit churlish, not to mention a waste of everyone’s work.
On the other hand, the taskforce remit is very narrow given the scale of the challenge, and though it has not especially signalled this, Labour may have its own plans on student mental health and wellbeing. The best guess is that there will be a political settlement in which the taskforce completes its work with the endorsement of the new HE minister, but is politely warned off from generating any recommendations or advice for government that could be off-agenda for Labour.
Lifelong learning entitlement and foundation years
The 2023 Lifelong Learning (Higher Education Fee Limits) Act made provision for the Lifelong Learning Entitlement (LLE) to be implemented by giving ministers the power to set the price of a single academic credit. These powers may be useful for the incoming government but the likelihood of the LLE being implemented right away seems low, given the pre-existing delays to rollout from the Student Loans Company that speak to wider systemic issues, and the aspiration set out in the Labour manifesto for a more wholesale consideration of the post-16/tertiary system.
The 2024 annual statutory instrument that confirms fee caps would in principle have been the first made under the new regulations. It would also have been the one in which the planned cut to foundation year fees in OfS price group D would have been enacted. There’s an opportunity for Labour to quietly not cut foundation year fees, which would offer some relief for institutional finances.
Franchising
Lack of government oversight has left open a “back door into the student loan system for organised fraudsters,” the House of Commons Public Accounts Committee concluded earlier this year. The committee’s inquiry followed a National Audit Office report which found that the proportion of detected student loan fraud cases which were occurring at franchised providers had increased from four per cent to 45 per cent in just two years.
This is a technical but not necessarily especially politically problematic issue: it’s likely that a Labour government would be more inclined than a Conservative one to take action, given it can simply blame the failures of the system on the last government. There could, however, be a direct impact on specific institutions that have relied on income from franchised provision to carry them through the lean times. The committee’s recommendation that a guiding limit should be placed on the proportion of fees that awarding institutions can recoup from franchising arrangements is also unlikely to be especially popular.
Pensions
From April 2024, employer contributions to the Teachers’ Pension Scheme (TPS) rose by five percentage points in England and Wales, to 28.68 per cent. The equivalent schemes for Scotland and Northern Ireland are seeing increases of three and four percentage points respectively. For those modern universities mandated to participate in these pensions arrangements for their academic staff, this represents a significant increase in costs.
After an unsuccessful campaign last autumn for the Westminster government to cover the increased costs for higher education institutions – as it did for schools and colleges – in March, Universities UK and the Universities and Colleges Employers Association (UCEA) wrote to then higher education minister asking for a review of universities’ participation in the scheme. There was no public response from the Department for Education ahead of the election, but such a review – if it did come to pass under a future government – would be strongly opposed by trade unions.
This promises to create a major headache for the incoming government as pensions costs are driving financial pressures in those affected institutions, and it’s clear the scheme as a whole is very expensive, but teachers pensions are hardly something a Labour government would be keen to mess with.
Free speech
The key provisions of the Higher Education (Freedom of Speech) Act, particularly the new OfS complaints scheme will come into force over the summer, with a consultation on the scheme’s implementation now concluded. While there is nothing immediately for an incoming government to do in legislative terms the enacting of a scheme that at every stage has been critiqued as at best a hammer to crack a nut and in practice, probably unworkable, creates a risk for a Labour administration that an early test case creates some kind of media storm – especially if it concerns the clash of free speech and protected characteristics.
With pro-Palestine encampments continuing to flourish on university campuses, Alice Sullivan’s review of sex and gender and scientific data due to report later this month, not to mention the rollout of the new duty on gender-based harassment and violence expected imminently from OfS, there’s plenty of potential flashpoints to keep the director of free speech quite busy.
The risk for the government is that free speech cases in universities drag the government into the kind of culture war that the previous government adored but this one will want to avoid like the plague. Attempting to dismantle the provisions of the Act would be pretty costly in time and political capital, so the best hope is that nothing too controversial happens when the scheme kicks off in August.
