A centuries-old sector that continues to bask in international renown should in theory be enjoying the best of times. Yet UK education leaders are grappling with a swarm of particularly tough issues.
For some, the threat is existential. The new regulator, the Office for Students, recently warned that it exists to protect students’ interests and will not bail out institutions in financial trouble.
One of the risks of this focus on financial survival is that it eclipses the value of education itself – to individuals and to society at large. I hope that if nothing else, the headlines about failing institutions will revive our appreciation of the place of educational institutions in our communities.
Costs and competition
For many universities, the numbers are a challenge. A demographic dip in 18-year-olds and the lifting of the cap on Russell Group admissions have squeezed applications.
Competition for international students is becoming fiercer too. The lure of countries such as Canada and Australia, which offer a more relaxed approach to work after study, currently gives them an edge over their UK counterparts.
Meanwhile, universities and independent schools both face rising staff costs, not least in pensions and the apprenticeship levy. The prospect of a cut to tuition fees could compound this, and the yoking of Teaching Excellence Framework ratings to future fee income is already piling pressure on performance.
Without seeking to underestimate these risks, I hope and believe there will not be institutional failures, though mergers are a real possibility. The sector has repeatedly shown its ability to adapt to changing political and economic realities: today’s environment will test its creativity further.
Adapt to thrive
In the short term, institutions need to hold their nerve and keep all their stakeholders onside with candid, timely communication. More strategically, they must map their profiles to local needs so they can survive and thrive.
Many are already ahead of the game. Birmingham City University, for example, has broadened its offering with the new Royal Birmingham Conservatoire – the first to be built in the UK for 30 years. It offers state-of-the-art performance space designed to attract the most high-calibre students and performers.
The Conservatoire is part of a new trio of buildings at the university that house a range of Schools in fields such as law, education and life sciences – each of them pivotal to the university’s role in the local economy. HSBC provided £45m in project finance and working capital to complete the development.
Enabling institutions to develop their estate in line with strategic priorities is an obvious way that banks can support the sector. Supporting more creative ways to raise funds is another – HSBC has acted as Bookrunner on seven of the eight public bonds issued by the sector to date.
But our contribution is not limited to financial products. We seek out partnerships that allow us to contribute to institutional strategies in a wider sense.
With student mental health rightly taking priority on university agendas, we run campus workshops to help take the pressure off, by equipping students with skills such as budgeting and CV writing.
Similarly, we offer mentoring and skills-building for students with ambitions to set up their own businesses – and we are always on the lookout for enterprises we can invest in as they start to trade.
We also use our global reach to support universities and schools to open overseas campuses, tapping in to the hunger for the UK’s quality of education in countries such as China.
Underline the benefits
Higher education enables people to fulfil their potential. Its institutions train the professionals every community needs. They are also, of course, major local employers in their own right. Student populations bring economic and cultural value to local communities. And UK universities are among the most innovative in the world, transforming our lives through ground-breaking research.
These benefits are well known, but they bear repeating as the sector is beset by challenges that threaten its integrity. It’s in all our interests to ensure that the UK retains its educational crown.