The golden age of universities is over says new OfS chair

It’s a piece covering his “first interview”, although it’s a formulation that Behan used in his review of the regulator when it was published last month.

As DK pointed out at the time, it’s almost certainly a reference to first OfS Chair Michael Barber’s repeated exhortations in 2018 to “seize the opportunity ahead”, because:

…golden ages don’t have to be in the past.

It’s not immediately clear that the past six years have been “golden”, but the ST does report Behan going further than his two predecessors on commenting on what should be done:

I think if we’re going to mitigate these risks to this sector, we need to look at all these possibilities. So all these things should be on the table as … we approach the budget in October, as we approach the spending review, there needs to be consideration of what the options are to secure the financial sustainability of the sector.

A separate leader comment references the Augar review – pulling out the return of the maintenance grant at £3,000 a year. Of course what Augar noticed was that it wouldn’t really make a lot of difference – Augar’s proposal was to switch out grant for loan on a means-tested basis, and given the poorest entrants tend to have the poorest labour market outcomes, they were unlikely to pay back £3,000 in loans anyway.

The leader comment also argues that the rate of interest should be cut from 8 per cent to whatever the government pays to borrow – and in return, graduates could start repaying loans at a lower earning threshold than the present £25,000.

The former has already been done for 2023 entrants (not that those at the ST have noticed), and the latter would make the lives of graduates in their 20s and 30s even harder than it is now – which is why Theresa May’s “British Dream” speech in 2017 put it up to £25,000 in the first place:

We have listened and we have learned… we will increase the amount graduates can earn before they start repaying their fees to £25,000 – putting money back into the pockets of graduates with high levels of debt.

So what else could be done? Behan has thoughts on international students:

He said all options should be on the table to secure the financial sustainability of institutions, amid fears that some face bankruptcy…. including … lifting visa restrictions imposed on international students by the previous Conservative government.

Despite the much warmer words on international students, it’s hard to believe that Home Secretary Yvette Cooper will be allowing international PGTs to bring dependants into the country again – and even if she does, the currency situation has if anything worsened in Nigeria, and the stock of suitable family accommodation near to universities hasn’t magically grown.

That just leaves cutting costs:

There’s not one single silver bullet that is going to sort this. But by the same token, the sector needs to innovate and find new models, new business models for a way of delivering courses. It’s not just what government can do, it’s how the sector can also begin to adjust and flex. Carrying on as we’ve always carried on, I don’t think is an option.

As such, he’s just re-emphasizing what his CEO Susan Lapworth has been saying all year when he talks about those “optimistic” forecasts on international growth:

If those growth figures have not materialised — [and] I don’t think they will — then they are going to have to rebalance their financial plans and rebalance their budgets.

The piece goes on to discuss a “a briefing to vice-chancellors seen by The Sunday Times”, in which OfS is said to have told universities they must “draw up plans on how they would handle the unplanned closure of a university, perhaps in the middle of an academic year”, to safeguard students.

It apparently warns them that it could require any university at risk of closure in the next 12 months to have a “six-point plan for students” to finish their degrees at another institution to prevent a “disorderly market exit”.

It turns out that the “briefing to vice-chancellors” is the “navigating financial challenges in higher education” insight brief that OfS put out in May, which said that it had already imposed “six student protection directions” that seek to protect students as far as possible from the consequences of a disorderly exit.

Maybe the ST has confused “six student protection directions” for a six-point plan rather than six providers being subject to C4 Student Protection directions. Either way neither condition C4 nor anything else OfS has put out will be protecting students from cuts to the courses and services they’ve already signed up for before a university goes under.

Elsewhere in the piece, Behan says that as the “fourth education revolution” comes, there will be a push for shorter courses and a move towards lifelong learning:

I think the system is increasingly going to need to adjust to lifestyle choices of students, with many more students working and studying at the same time.

If I had a pound for every time someone had predicted the death of demand for the full-time course, I’d be on a beach – not least because underlying demand is still very high. What’s actually happened already is the death of the full-time student – where funding flexibility to fix that couldn’t feel any further away.

Still, at least it’s not the current government’s fault:

This government is gripping the devastation we have inherited across our education, which is why Sir David was appointed to lead the reform of the Office for Students. By contrast the Conservatives put their cronies into regulators … and watched our higher education sector rot.

Tough decisions now lie ahead to ensure the sustainability of the sector. Parents and students should never, ever forgive the Tories for the damage they’ve done.

Meanwhile on Friday iNews reported that officials have “drawn up proposals” to increase tuition fees to stave off a financial crisis among universities, while planning “a more fundamental review” of the funding system to consider whether it is fit for purpose.

Senior university sources told iNews that the government might pursue a “twin-track approach” by implementing a one-off increase to fees or the teaching grant to “buy time” for a wider review of the system:

No big news there – DfE officials have been assuming the existing freeze on fees would end in 2025 already. And if the maximum fee was to increase, there’s the tricky question of when it could be imposed, and who it could be imposed on.

iNews says any increase to fees would likely keep them “under £10,000 for presentational reasons”, with figures in Sir Keir Starmer’s team said to be “wary about such a move”.

That wariness about the presentational impacts is a real issue – especially given that starving universities and students of resources now is a result of keeping the long-run costs of HE low for the top half of earners rather than the bottom half.