(An extract from a speech given to the AUA Autumn Conference, Cardiff Nov. 23)
Things considered universities are not in bad shape. This is compared to 2011 when HEFCE was reporting 1 in 5 of universities in deficit and half below the recommended 3% surplus.
Today the average surplus is 5.2% of income and last year only 10 universities reported deficits.
In parallel Higher Education has been a UK success story. Countries have been investing and skilling up their young people. In 2016 across OECD countries 43% of 25-34 year olds had some tertiary education. In the US 48%. In Japan some 60%. In the UK 52%. The UK has had to keep up and compete.
Two and half times more young people are now engaged in HE relative to 20 years ago, benefitting them enormously with better income, health and satisfaction prospects never mind additional tax revenue to the treasury.
Importantly with this expansion has come greater social mobility with 9,000 more students in the last 7 years from low participating neighbourhoods being accepted.
This been replicated in international interest from most parts of the world in UK HE. According to HESA, a 21% increase from the EU and the US, about 100% from China and the Middle East between 2006/07 and 2015/16.
However we know we have to meet some future demands. The notable one of being Brexit which has created uncertainty in student fee and research income, increasing the cost of borrowing and unsettling our EU staff.
We should deal with uncertainty head on. Not sit and watch what is happening in terms of Brexit but tackle its unintended consequences and assist UK productivity and growth.
Universities I believe must be at the forefront of Brexit. Not just in improving the UK’s good research and innovation links with Europe, maintaining great programmes like Erasmus, but if the upside for leaving Europe is about the opening up of the UK economy to the world then we should build on one of the UK’s biggest assets and exports, persuading those from overseas that the UK is tolerant and welcoming.
This means continuing to strengthen our offer to the UK economy and overseas by investing in the UK benchmark in academic quality and approach. This means we enable even greater access to HE, success and employment progression for all students. We embrace the wave of consumerism to ensure students’ rights are protected. We improve on our academic quality and use the digital revolution to enhance the quality of the academic experience. And fourthly we deliver value for money for students by reducing ongoing costs and making sure as much is invested in the student experience as we can.
In fact these are The Office for Students’ new draft objectives.
I am optimistic about the future of higher education and its contribution to the nation. This is based on future demand from both students and employers. We will need to support the next demographic upturn from 2021 onwards with the number of 18-20 year olds expected to rise by 200,000 by 2030. And there will be careers for them. Employers have been saying their recruitment priority is young people with higher skills underlined by last year’s CBI Survey where 80% of business were forecasting vacancies in higher skills, twice that of intermediate skills and more than 10 times that of lower skill vacancies.
But I have other reasons too. Universities have shown they have resilience and can adapt. We have shown that we can improve on the inherent quality of what we provide.
HE can be the change and take a lead on many of the things that have evaded us as a nation for too long – like stubborn youth unemployment with more than 10% of 16-24 year olds out of work or poor educational progression that leads to many other young people not reaching their full potential.
It is imperative that UK HE thrives. Not only does the UK economy rely on it but so does the future livelihoods of many young people whose global outlook, resilience, adaptability and futures depend on having something behind them to meet the future challenges.