What’s coming up for HE policy in 2025–26

It was early November 2024 when Secretary of State for Education Bridget Philipson issued her edict to heads of institution in England, confirming the government’s plans to increase the undergraduate fee threshold to £9,535 from 2025–26, and setting out her five priorities for higher education.

Ten months on and there remains not a great deal of additional flesh on those bones. The planned summer white paper on post-16 education and skills, incorporating HE reform, has been pushed to the autumn. In the interim, while the Office for Students (OfS) has stepped up its work on financial sustainability, it’s clear that the government is not minded to ride to the rescue of the sector at system level, whatever it might decide to do about financially challenged institutions.

The Spending Review was accompanied by the announcement of a further squeeze on the Strategic Priorities Grant. The immigration white paper proposed a six per cent levy on international fees. The prospect of an ongoing annual inflationary fee threshold uplift remains unconfirmed. And the rollout of the Lifelong Learning Entitlement, while potentially paradigm-shifting in the long term, offers mostly short-term pain and expense for rather limited gains.

This area is getting greyer

Though ministers probably wouldn’t articulate it like this, at stake is the status of higher education as a “public realm” sector. It’s not currently politically or economically advantageous for government to be seen to take seriously the sector’s financial concerns even where there are signs of systemic weakness in the funding model. That pragmatic (or cynical, if you prefer) position is bolstered by a regulatory framework that views higher education providers primarily through the lens of service provision to students rather than as public institutions providing a range of public goods in places.

Yet for a government that is politically and economically concerned with the provision of public goods in places, nor is it especially politically palatable to lean into the notion of independent higher education providers doing whatever they can to ensure their own success and sustainability rather than acting with reference to wider common purposes.

There’s often a strong degree of overlap between institutional interests and the public interest – arguably one critical dimension of higher education leadership is being able to locate and occupy that common ground. Two things can be true: institutions can, and do, pursue both their own self-interest and the common good, simultaneously. And discussion of abstract concepts like public and private obviously ignores the actions and motivations of individual institutions, many of whom go to quite a lot of trouble and expense to work with and for the interests of their stakeholders.

But at system level what you think an “HE reform package” should include depends very much on how much you think the private interests of HE institutions diverge from the wider public interest, in what areas of activity, and the extent to which you think the government can or should do something about it. And I don’t think those questions have yet been resolved in the corridors of power, where arguably the locus of responsibility for “higher education” as an object of policy remains scattered.

It is relatively easy to point to examples of where the HE market model has created areas of concern – particularly when it comes to loss of subject diversity in particular regions or localities, or a lack of a subject offer in an area of known skills gaps, or to the rising costs to students and parents of sustaining full-time study, or to the risks to academic quality arising from particular modes of delivery or from instability in institutional finances. It’s much harder to articulate a policy settlement that articulates appropriate, measured, inexpensive and effective government intervention at system level to realign institutional and public interest where there appears to be divergence.

In particular, when it comes to questions of “transformation” – in the sense of individual institutions changing their academic portfolio, or use of technology; in the sense of institutions joining together to create efficiencies or realise additional value from scale or coordination; and in the sense of the future overall size and shape of the sector – the role of government remains opaque. It may be possible that “transformation” will happen in response to market demand and financial pressure and be funded from private sources. It may also be possible that “transformation” will only occur with some active convening (and financing) from government. Whatever the claims made about what ought to be happening, nobody really has a firm view on how much transformation is really required, what it should look like, or whose responsibility it is to make it happen.

It’s possibly not all that surprising, then, that what has emerged from government on higher education in the last academic year has been rather “bitty” – to use the appropriate technical term. A consultation on franchised provision here, a revision to free speech legislation there, a slide deck on preparing for the LLE over here, a cheeky new levy over there. Don’t expect a grandiose new vision for HE to emerge this year; instead turn your mind to deciding whether the sum total of all the things that will be occupying minds in the year ahead add up to something that equals a material change of state for the sector.

It’s all coming up

When the post-16 education and skills plus HE reform paper does show up, it will almost certainly hit some familiar notes: regional economic growth; skills; opportunity. We know there’s an appetite in government to think about “coordination” of post-16 providers in places and an aspiration to deploy a more coordinated approach to streamline everything from the regional skills offer to employer engagement.

Policy architecture available includes the Devolution Bill, Skills England, the planned Growth and Skills Levy replacing the Apprenticeships Levy, and the Lifelong Learning Entitlement – as well as OfS’ signals on a shift to a more regional approach to widening access. There is significant support in principle for the notion of coordination for the benefit of places, but a glaring absence of ideas of how independent providers might be not only brought to the table but arrive at a consensus about who should offer what kind of education opportunity to whom.

Also potentially in the mix for an “HE reform” package, if Bridget Phillipson’s priorities haven’t shifted in the last ten months, are academic quality, civic engagement, and efficiency. The Department for Education has not yet said what its plans are with regard to tightening up oversight of franchised provision, following its consultation earlier this year, so that may well appear also. OfS is already planning to consult on its planned new integrated quality framework in the autumn, so assuming there is effective coordination between government and the regulator there should be alignment between what the government proposes and what OfS consults on.

One wild card to look out for is institutional governance – OfS has signalled in the past year that it has concerns about the ability of boards of governors to effectively manage financial sustainability challenges, whether that is in securing academic quality under pressure or retaining effective oversight of new partnerships and income streams, and that concern has been reinforced in communications from DfE. While it would be surprising to see government take a view on the constitution of boards or on the codes of practice they are encouraged to adhere to, it would not be entirely unexpected to see a request for OfS to further extend or strengthen regulatory oversight in this area. Elsewhere on the site, incoming Advance HE chief executive Alistair Jarvis has signalled some key priorities for development in governance within weeks of taking up the role.

A further wild card would be something on graduate employability – previously ministers have suggested that institutions whose graduates do less well in the labour market by the current measures should cut the pay of their heads of institution. While that’s a proposal that obviously plays well for media, it doesn’t amount to a serious policy. But with (probably wildly overstated) concerns doing the rounds about graduate jobs and AI, and (much more sensible) questions about the value of graduate skills in different parts of the country feeding directly into ideas about equity of opportunity, government may well feel this is an area it wants to make a target for policymaking.

Doing more with less

The future of research funding seems increasingly lashed to the mast of economic growth. It is the golden thread that runs through UKRI’s latest plans, the basis of the industrial strategy, and UKRI rates financial sustainability within the research system as high risk and high likelihood.

2025–26 is going to be about who gets paid, on what basis, and how the impact of the resulting research activity will be measured. Everyone’s favourite forever debate, the future of REF, fits neatly within this financial triangle. 2025–26 should bring certainty, if not consensus, on the shape of the next REF, even if the overall sum up for grabs is a fraction of the overall R&D budget. Given the timescales involved in REF it is likely that there will be some kind of announcement in the next few weeks on its future.

Place is going to continue to be the primary lens through which economic growth is discussed. The Local Innovation Partnership will launch this academic year with at least £30 million for each of ten regions across the UK, including one in each of the devolved nations. The success of the industrial strategy is entirely reliant on improving productivity across the country so expect to see new funds, tweaks to existing funds, debates on devolutions deals, and a raft of place based initiatives coming from the sector.

Once UKRI’s new mission leads are in post, along with UKRI’s new chief executive who is now in his role, the sector should have a clearer sense of how their work will align with the government’s missions. It would be refreshing if the new personnel also usher in a new era of stability across the research ecosystem. The evolving work into research evaluation may prove a useful tool in this mission.

Of course economic growth is limited by the financial reality universities find themselves in. There is lots of concern about full economic costing (FEC) but very little action on reducing the financial burden of research. There are clear signals of reduced capital spending and following UKRI’s outgoing chief executives statement on the possibility of research consolidation it looks like frugality will continue to be a reality for many.

Away from home this version of Horizon Europe enters its penultimate year with the UK’s entrance to the new scheme the government’s preferred option. The ongoing trampling of academic norms in America will continue to shape UK-US partnerships while the future of UK-China research partnerships will once again be at the mercy of global politics.

At a more institutional level an outcome on the publishers agreements negotiations between the sector and five of the major publishers looks to be coming to a head. The sector currently spends £112 million annually on Jisc negotiated agreements with the five largest publishers. A decision on whether to accept or reject the publishers proposals is due imminently. If the offer is rejected there will be significant pressure to find agreement or an alternative before the end of the current deals in 2026.