UUK has worked with 10 commissioners, largely drawn from outside higher education, and consulted with UUK members and stakeholders, to produce a package of reforms aimed at stabilising, mobilising and maximising the contribution of UK universities in the next decade and beyond. The eight chapters cover what universities already do in education, research, knowledge exchange and innovation, and examine what works, what should change and what the sector needs from government to achieve more.
At-a-glance:
- The tertiary participation target should be 70 per cent of 25 year olds studying at level 4 or above by 2040, with a particular focus on access in low participation neighbourhoods
- Government should increase funding for teaching to meet the real costs through a combination of linking fees to inflation and restoring the teaching grant. It should also reverse the decline in quality related funding for research (p8)
- Maintenance grants should be reinstated for students from the most disadvantaged backgrounds, and maintenance loans increased in line with inflation (p5)
- Government should develop, with the sector, a clear plan of action for a situation where an English university finds itself in severe financial distress (p8)
- A major efficiency drive by universities should be undertaken; Universities UK will lead this, bringing members together to share learning on efficiency, transformation, income generation and options for regional or national shared services (p9)
- To support this work, VAT on shared services should be removed and a transformation fund established to accelerate university-led change (p9)
- Universities should boost philanthropic giving, building on substantial growth in recent years, with government contributing matched funding and tax breaks for legacy giving (p9)
- Government should establish a Tertiary Education Opportunity Fund to be awarded to HE–FE partnerships to support programmes in low participation areas; coupled with a redesign of the Lifelong Learning Entitlement (LLE) (p5)
- Universities should take a more consistent approach to contextual admissions and improve support to students and graduates, including five years’ access to careers services after graduation (p5)
- Universities should be critical partners in Local Growth Plans, acting as a single point of contact for key partners, with government incentives to work together (p6)
- Government should make a long-term commitment to the Higher Education Innovation Fund, and the consolidation and expansion of the Regional Innovation Fund, with counterpart funds of sufficient scale in the Devolved Administrations (p6)
- Universities should not be expected to contribute more than 20 per cent of the costs of research; funders should review incentives and requirements that demand in-kind or matched contributions to research grants and other mechanisms. Universities should aim for closer to 100 per cent cost recovery for industry-sponsored research, unless engaging with small or emerging businesses (p7)
- Government should provide a sustained real-terms increase in quality related funding and an additional uplift in the Charitable Research Support Fund in line with charitable investment (p7)
- Universities should build in strategies to mobilise their own and/or venture capital to support the commercialisation of research, IP and scaling up of university spin-outs (p7)
- Government should develop a Global Strategy for Universities. Universities and government should develop a new Compact, taking action to secure sustainable levels of international student recruitment and well managed growth (p7)
Implications for governance:
The UUK blueprint effectively outlines a bargain that could be struck between the government and the sector: one which solves the current financial crisis, while at the same time makes universities more responsive to the government’s skills and economic agenda.
In return for raising tuition fees and the teaching grant and reintroducing maintenance grants, UUK commits to more efficient operations and more collaboration to bring about the skills overhaul needed to drive the economic growth that the government has pledged to deliver.
To be that driver for change, the sector needs a reliable financial foundation for teaching, student maintenance and research, UUK argues.
Any funding injection decision is in hands of the Treasury but according to reports, plans to increase tuition fees may already be under consideration by Department for Education officials.
Governors will want to consider the implications of UUK’s proposals arguing that if the demand for increased funding is met, the sector must respond with reforms of its own with a focus on innovation.
A chapter entitled “Evolve, innovate and reform” outlines steps that universities can take to make themselves “more resilient and efficient and adapt to meet the needs of the country”. These reforms have implications for governing boards as they consider strategic decisions on the shape and size of their institutions, the portfolio of courses on offer, quality assurance, and the governance of current and future partnerships.
The UUK report says that universities have to find “new ways of reaching different student populations” in the quest for a better skilled workforce. Some of the suggestions, such as working with schools and colleges to boost attainment and opportunities and better links with local businesses, employers and metro mayors, are already being explored by universities in response to guidance from the Office for Students.
Attuning to student and local need could involve “moving some focus away from three-year, full-time undergraduate provision”, considering more the needs of mature learners and “embracing more modular learning, supported by the LLE”.
Collaborating with regional and local partnerships can help avoid duplication in the educational offer across a region, the report says, and create greater strategic alignment and joint working. Governors might consider what collaborations their institutions are already involved in, and what scope there is to expand and widen these.
Suggestions for efficiencies and reducing costs within institutions include increased digitisation and use of AI to save staff time, updating old systems to reduce maintenance costs and the threat of costly cybersecurity breaches, as well as cutting the number of tools and software to lower costs in maintenance and licences.
The blueprint also suggests looking again at estates strategies to explore commercial opportunities, such as leasing space or bringing commercial partners onto campus, and combining digital and in-person provision to optimise the allocation of resources.
Many of the paper’s proposals will be of particular interest to staff and student governors. For instance, it urges institutions to take a fresh look at staff–student ratios, possibly leading to a review of the requirements of Professional, Statutory and Regulatory Bodies (PSRBs). Another idea floated is greater demarcation between staff who undertake teaching and research. Exploring “subsidiary employment models” to increase flexibility on pensions is also recommended.
More generally, the report points to the school sector and multi-academy trusts as possible examples of “group structures” that can allow for centralised strategic decision-making efficiencies. It also highlights federated arrangements, such as the University of London model.
In the same vein, regional consortia for sharing services can create strategic alignment and efficiencies, such as the shared campus between Exeter and Falmouth universities.
While there is appetite across the sector for closer working, concrete examples are rarer. A recent survey of UUK members found that 39 per cent are interested in undertaking more shared services but just 7 per cent reported current activity. Cost is a possible prohibitor, so the blueprint makes clear that government needs to offer funding and incentives to help unlock the efficiencies that can be achieved through these arrangements.
Another area that can hamper efforts to explore new ideas, create flexibility and draw new students into the system is increased regulation. The heavy regulatory burden restricts universities’ ability to innovate and puts a strain on scarce resources, according to the UUK report. Research commissioned by the organisation in 2023 found that in 45 per cent of universities, this regulation takes up a significant or major proportion of governing bodies’ agendas – time that is not then being spent on exploring the news ways of working, partnerships and drivers of growth that the government wants to see.
The blueprint recommends streamlining and reducing bureaucracy and ensuring regulation is only introduced where the public benefits are clear and costs justified, potentially giving boards the time and space to support and challenge the executive in introducing the transformative programmes that UUK is recommending.
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