HEPI Report (51) Higher Education Supply and Demand to 2020 has been published today (Thursday 3 February 2011). This report is the most recent in a series HEPI has produced looking at the question of demand for higher education. Each one focuses on a different aspect of the topic. The policy environment in which this report is produced is considerably different from previous reports, with significant levels of unsatisfied demand for the first time. The report is available online.

Briefly, HEPI’s conclusions are:

The proportion of applicants failing to receive offers has increased very rapidly from 6 per cent of applicants in 2003 to 10 per cent in 2009 to the 2010 level of nearly 14 per cent. We believe that demand is likely to increase substantially in the next decade or so.

Previous HEPI reports have shown that despite the fall in the number of 18-21 year olds in the next 10 years, the demographic decline is considerably dampened by the fact that the birth rate of better off sections of the population has remained largely unaffected. Significant numbers of young people leave education at the age of 16, despite the fact that some of them have achieved impressive numbers of GCSEs. After 2015, young people will not be allowed to leave education and training before the age of 18. This will increase the pool eligible for higher education.

Most particularly, there is a large gap in attainment at present between males and females and between social groups – there are other discrepancies in achievement as well but these are the main ones. There is no intrinsic reason why some of the differences should not be made up (and indeed there is some evidence that the difference between social groups is already being eroded). As the lower performing groups begin to improve their performance, this will substantially increase demand.

There are other factors – such as the state of the economy and prospects for employment on the one hand and the possibly dampening effect of higher fees on the other – that may impact on demand, but these are not considered in the report.

Of particular note, is the fact that in terms of UCAS tariff scores those with no tariff points at all are by far the largest group entering higher education – more than one third of the total. The biggest growth in applications recently has been among this group, as has the largest increase in rejections. Not all of these will represent qualified demand, but a substantial number will.

The report quantifies the underlying extent of unsatisfied demand and projects likely levels of unsatisfied demand in the future. It concludes that there was unsatisfied qualified demand of 62,000 in 2010, (up from 38,000 in 2009) – equivalent to about 17.3 per cent of those who entered higher education through UCAS, and an increase of over 60 per cent from the previous year. It also concludes that there could be as many as nearly 100,000 disappointed applicants in 2020 – over 20 per cent of the number of applicants to UCAS in 2010.