Heard the one about the campers in the forest, who wake up to find themselves face-to-face with a brown bear?
One camper puts on running shoes. The other says: “What’s the use? You can’t outrun a brown bear”. “I don’t have to outrun a brown bear”, the first camper replies, “I only have to outrun you”.
An allegory about managing risk via ruthless competition, that joke is echoed in The Lehman Trilogy, currently staged at the National Theatre. In the midst of the Wall Street crash of 1929, Lehman Brothers assisted no other bank and allowed others to fail first, predicting the government would have to step in to ensure US banking in general survived. Don’t be the first bank to fail or the slowest camper, and it will all work out.
Financial challenges are mounting for the HE sector. More institutions are running deficits this year and Heythrop College has recently announced it is closing its doors. There are a number of factors relating to students which are driving costs up and income down and are contributing to financial concerns.
- Additional costs. It’s expensive to comply with policy and legislative changes which include the Teaching Excellence and Student Outcomes Framework; the General Data Protection Regulation; student protection plans; UK Visas and Immigration; quality regulation via the Office for Standards in Education, Children’s Services and Skills for apprenticeships and the Quality Assurance Agency for other provision, and reporting (continuously) to the Higher Education Statistics Agency. There are up-front costs for delivering digital improvements, even if there’ll be savings down the line.
- The increased costs of existing activity. Hikes in employer pension contributions for example, on top of annual inflation, cost of living increases, and incremental salary drift.
- At the same time, income per student might fall, thanks to three factors; the Office for National Statistics review of student loans, the post-18 review, and the rumoured reduction in income for apprenticeships.
- That’s all in the context of a finite, or shrinking, market in which many providers bet on growth not contraction; numbers of 18-year-olds in the UK are still dipping, mature and part-time student numbers remain down, and there’s ongoing uncertainty about European and international student recruitment.
The OfS has robustly asserted that HE providers will be allowed to fail, so on with the running shoes, campers.
Leaving aside debates about the value of HE in terms of discovery research and other factors, how many providers of nursing can close before the public notices the impact? Unlike subjects like law, which have expanded in some universities since the student enrolment cap was removed, and dwindled in others, nursing depends on relationships with NHS trusts and on placements, which do not easily move from provider to provider. There is already a national and growing shortage of nurses. Surely there will at some point be recognition of the impact of multiple providers exiting the sector?
Well maybe, but there would remain a question about whether any government can solve the sector’s income deficit. I am not counting on it. This looks like a moment when HE needs to take a hold on what happens next to us, and not just financially. Three things will be needed.
We need clear, long-term missions that unequivocally include public good as well as private benefit. London South Bank University has provided professional, technical and vocational education for 126 years. We change students’ lives and give them opportunities they wouldn’t have had without us.
But the benefits of HE reach far beyond the individuals who study with us, rippling outwards across society and into the future. Our graduates’ families live different lives because of us. In society, we are all the beneficiaries of nurses and architects, social workers and accountants, entrepreneurs and engineers. Future generations will benefit from graduates whose leadership will reinvent professions for a world which doesn’t yet exist, with jobs, technology, opportunities and dangers we don’t yet know about.
The imperative for higher education to out-manoeuvre the financial challenges comes from our stewardship responsibilities. We must enable the future to build on the past, not in a three-year cycle, but for generations. Staying focused on our mission enables higher education providers to connect to the commitment of university staff, whose discretionary effort and abilities are essential to solving the wicked problems we face. University communities coming together as teams is a source of enormous collective energy.
Competition has value. It creates conditions for challenge, benchmarking, and raising aspirations. But collaboration is also a force that drives quality. There are multitudes of existing examples. Universities join together to share student admissions processes, supercomputing facilities, libraries, and the JANET network. Through collaboration, we solve problems faster, develop expertise, and create critical mass. Our ability to collaborate, more than the pressure to compete, will enable us to solve the sector’s current challenges.
The rhetoric of students as customers rightly prompts us to learn from commercial sectors that have been much better than us at being personal, responsive, efficient, and distinctive. But students are not only customers. Being a student is a journey of challenge and risk, of loss and transformation. Our task is to support them. At London South Bank University, our students tend to be mature aged and face multiple challenges including longer commutes, more demands on their time, financial insecurity, a lack of family support or the need to support their own families.
We need to provide flexible individualised support when they need it. To do this, universities need to understand where the costs are, how to control them, when to release resource for other activities. Manual workarounds and poor organisational planning wastes money on duplication, errors and delays. Here we are redesigning our business processes to be simple and standardised by design, to transform our students’ experiences.
Lehman Brothers outran the slowest camper in 1929 but were caught by a bear in 2008. For HE, planning to outrun the slowest camper won’t be enough in the face of our financial challenges, and nor will hoping to be bailed out when the true scale of the national risk becomes obvious. We need to take our future in our own hands, with a focus on stewardship of our purpose, collaboration, and cost control.