The 2012 reforms of higher education in England – the switch to higher tuition fees and lower direct state funding – pose no immediate risk to the overall financial health of the country’s universities, says an official report published last week.
But the report from the Higher Education Funding Council for England, or HEFCE, says the changes in funding, coupled with recruitment shortfalls in 2012-13, have led to a wide variation in the financial performance and health of different institutions.
And it warns: “The increased volatility of income and greater uncertainty over student demand in future may present medium-term challenges to universities and colleges, including their ability to invest adequately in buildings and equipment.”
The report was published hot on the heels of a government announcement that tuition fees, which controversially rose to up to £9,000 a year from September 2012, will not increase further in 2014-15, either for new or continuing students.
HEFCE’s overall confidence is not shared by universities, who fear that the income from tuition fees will now not cover the loss of government funding that they replaced.
The aim of the reforms is to switch government funding from grants to universities to support for students, who in turn pay higher tuition fees.
Nicola Dandridge, chief executive of Universities UK (UUK), said: "Not up-rating the fee for the second year in a row will inevitably have the impact of eroding income for investment in the future, at a time of rising cost pressures, increasing student expectation, and the need to compete effectively in the global economy."
The announcement that tuition fees were to almost treble from September 2012 provoked angry protests from students at the end of 2010. The package of measures was passed in the House of Commons despite the first major backbench rebellion faced by the coalition government.
It was the impact of the reforms that HEFCE set out to assess. Its principal findings are as follows:
- Full-time undergraduate applications are up for 2013-14, after a fall in enrolments in 2012-13, when there was a significant drop in the number of people starting full-time undergraduate courses – 47,000 fewer students compared with 2011-12.
Both UK and European Union (EU) applications have risen for 2013-14, with 13,000 additional applicants to English institutions by the January UCAS (Universities and Colleges Admissions Service) deadline. There are indications that fee changes are not the only cause of shifts in applications and enrolments.
- Recruitment to full-time postgraduate provision has held up in 2012-13, following a trend of rising demand for postgraduate study over the past decade. But HEFCE concedes that the first students to have paid higher undergraduate fees will not generally enter postgraduate study until 2015, so the full impact of the reforms in this area is uncertain and therefore it cannot be assumed that this steady position will continue in future.
- A significant decline in part-time entrants at both undergraduate and postgraduate levels. Since 2010-11, part-time undergraduate entrants have fallen by 40% and postgraduates by 27%.
- Current evidence suggests that the reforms have not made young people from disadvantaged areas less likely to study full-time. However, 18-year-olds from the most advantaged areas are still three times more likely to apply to university than those from the most disadvantaged areas, and entry rates to elite institutions are six to nine times greater for young people from advantaged areas.
- Mature students have been affected much more than younger people. Acceptances of applicants aged 20 and over fell by 7.1% between 2011-12 and 2012-13, compared with just 1.7% for those aged 18 and younger.
- Females aged 18 are a third more likely to apply to higher education than males. The differences are largest in the most disadvantaged areas of England, where 18-year-old females are 50% more likely to apply than males.
- Clinical subjects and science, technology, engineering and mathematics have generally fared better than the arts, humanities and social sciences. Modern foreign languages experienced a 14% drop in entrants in 2012-13 and applications for 2013-14 suggest the take-up of languages is falling still further.
UK and EU students applying through UCAS to begin full-time courses in England in 2013-14 are up by 3% compared with the same point in 2012, following a dip of 10% in 2012-13.
HEFCE says that much of the 2012-13 drop was because fewer students deferred entry in the 2011 application cycle, possibly to avoid the higher tuition fees. The number of accepted candidates choosing to wait until 2012-13 to start their course fell by nearly 60%, around 14,000 students, in 2011-12.
The organisation believes that the latest increase suggests that previous patterns of applications may be returning – the total number of applicants for 2013-14 is 5.4% less than in 2010, the year before the new fee regime was announced.
“However, at this early stage in the cycle, we should be cautious about drawing hasty conclusions.”
The ability to draw any conclusion at all has been affected by a decision by UCAS to withhold annual figures on the number of applications to individual institutions. The data were due to be released after 15 January but will not now appear until the autumn.
Not even ministers or UUK have had a glimpse of the numbers at individual university level.
The fees announcement was made by David Willetts, the universities minister. He also said that maintenance loans and grants for students in England will rise by 1% in 2014-15 – below the current rate of inflation. Loans to cover tuition fees would also be pegged for full-time and part-time students.
The maximum grant for students who started their courses after September 2012 will be £3,387, rising to £7,751 for a student living away from home and studying in London.
Liam Burns, president of the National Union of Students, told the BBC that the below-inflation rise amounted to a "real-term cut in support" and called for fundamental changes to the way student finance was administered.
"The gap between the cost of living and the amount of support available to students continues to widen, and not increasing support at least by inflation is not acceptable. If the government truly values education they must make sure that students receive adequate levels of financial support."
HEFCE found that the reforms had not “blunted the international ambitions of universities”.
The report says: “If anything, their determination to face the challenges of international competition and seize the opportunities for international collaboration is greater than ever.
"The mobility of students and academic staff, the continuing trend towards research partnerships and the interconnectedness of higher education institutions worldwide have been driving new initiatives in curriculum development, wider research horizons and the creation of overseas campuses.
"These trends are expected to continue.”
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