This guest blog has been kindly contributed by Paul Woodgates, head of Higher Education at PA Consulting, and Mike Boxall, Special Adviser to PA Consulting. For more information visit www.paconsulting.com/education
This is by no means the first time that British universities have faced predictions of existential doom, still less huge uncertainties about their future markets and finances. The modern public university system was born in the double-whammy aftermath of the 1914-18 World War and the subsequent Spanish Flu pandemic. The sector has since weathered, and indeed prospered, through a century of economic, social and technological upheavals.
Over the past 15 years, we have been surveying the views and expectations of UK vice-chancellors on changes in higher education. Almost every one of our surveys has been undertaken against a background of apparently fundamental threats to the future of universities. These include the shift to fee-based funding, the abolition of student number controls, the encouragement of competition from new providers, sharp declines in the numbers of school-leavers and adult learners, the threat from MOOCs (Massive Open Online Courses) and other alternative study modes, and most recently the move to adversarial consumerist regulation. Each of these changes has generated speculation about the demise of universities as we have known them and the ‘inevitable’ closure of some.
And yet, despite the recurrent narrative of gloom, the responses of most vice-chancellors to each wave of allegedly existential threats have remained remarkably sanguine. Asked for their forecasts of the outlook for their institutions and for the wider university sector, the majority of predictions from each survey have been for continued growth, continuity and stability. And, although life for most universities has undoubtedly grown progressively tougher over the past decade or so, they have largely been proved right, as student numbers and revenues have grown steadily. The entrenched conservatism of both universities and their students, while often frustrating to policymakers seeking to modernise a system they perceive as old-fashioned, has had the side effect of fostering remarkable resilience to passing disruptions and policy shifts.
Nevertheless, there are reasons for expecting the post-Covid tsunami of shocks to the higher education system to be among the worst yet. It seems clear that, for a few years at least, university leaders must plan for a smaller, poorer and more precarious national sector. There will be – indeed there already is – excess capacity across the system; loss-making courses, campuses and activities have been cut by many institutions, even before the coming falls in international students and business revenues. None will be able to grow their way out of the crisis on the back of buoyant demand from Chinese students, as many have done in recent years. Demand from potential home students and from employers will probably go down before it recovers. Universities’ ability to cross subsidise loss-making research and widening participation programmes from profitable international fees and traded services, already shrinking fast, could become a thing of the past. And all of this at a time when universities’ political capital, and the inclination of Westminster to prioritise the sector’s pleas for special treatment, was, at least until a few weeks ago, at an all-time low.
No one is predicting that all this means an end to higher education. National and global needs for advanced education, research and knowledge exchange will be greater than ever to support the years of rebuilding and reconstruction that will follow the pandemic. No one knows what the ‘new normaI’ for the post-Covid economy and for higher education within it will look like. But most universities have already accepted that it will be very different from the past. In just the few weeks since the Covid crisis struck, our universities have demonstrated a hitherto unknown ability to reinvent their ways of working at unprecedented scale and speed.
Universities have shown themselves able to introduce fundamental reforms that would normally have taken years in a matter of weeks and even days, with some two million students being moved almost overnight to online teaching and assessments with generally positive feedback on the quality of the new experience. There has been an almost wartime spirit of cooperation between institutions and public and private sector partners. University labs and equipment have been turned over to Covid testing, treatments and potential remedies; vacant campus accommodation has been made available to front-line workers; and students and staff have joined the informal army of voluntary support services. Much of this cooperation has given real substance to universities’ civic engagement with their local communities, businesses and services (especially in healthcare) – something that was often quite limited in the recent past.
These highly laudable measures have of course been taken in the context of the unprecedented national state of emergency, and to meet immediate urgent needs. But they demonstrate latent capabilities for agility, cooperation and rapid innovation that will be vital as permanent features if our universities are to succeed in whatever the post-covid ‘new normal’ has in store. The maxim, ‘Never let a good crisis go to waste’, has particular resonance for universities at this time. While the transition may be painful for some, the sector could well emerge more agile, more innovative and stronger than before.
Don’t underestimate the challenge facing our universities.
History does not repeat: but it does follow patterns. The algorithm of global crises informs us of a sequence, confirming the convention that the trauma or crisis…wars, financial downturns…is less enduring than the aftermath. Previous assumptions and hierarchies are challenged and changed: and new priorities, processes and structures emerge. We have no reason to expect less of the current Coronavirus Pandemic.
IThe extent of ‘shock’ to the existing system necessitates a level of response that is unprecedented. The new institutional behaviour, on the part of universities, will go far beyond protecting the interests of students, staff and stakeholders during the period of emergency and extend quickly to fundamental shifts in the market operations of universities, the character of learning and teaching, and the manner of governance, accountability and funding. There will be new expectations of universities: and their measured response will require them to transform how and what they deliver.
The current narrative is under-stated, focussed on expecting optimistically a degree of control of the Coronavirus Pandemic and which enables resumption of university activity in the Autumn, loosely defined, or January as a worst case. The assumed (preferred?) chronology is the virus contained in no more than six months and the likelihood of a staged return to full levels of operation. The immediate challenge will be to recover recruitment or find compensatory recruitment. This will be difficult in a context of too many UK universities. Domestic crowding out has been avoided by elite universities finding easy compensation in the international market. Those days are gone.
There are differences across the UK. Market competition will descend into ‘dog eat dog’ in England, and the circus of non-conditional offers has shown already the way downward. By contrast, the controlled system of quotas in the Scotland will reduce the options of the ancients (Aberdeen, St Andrews, Glasgow, Edinburgh) and internationally active (Herriot Watt, Strathclyde) unless there are increased quotas or their abandonment. They crave a domestic market, as in England. The Scottish Government will be caught up in the dilemma of committing even more public spending on tuition fees or letting some universities go to the wall. The resolution may be mergers.
Colloquially, there is open acknowledgement of a ‘new normality’. But even restricting the frame of reference to ‘recovery’ by January 2021 cannot disguise the fact that radical changes will be the consequence of the known Coronavirus experience. The immediate effects could be selective student and stakeholder dissatisfaction with the responsiveness of universities as well as increased emphasis on collaboration, from shared services to mergers.
Individually, universities are coming to terms with the fact that there will be new expectations on the part of students, that internal configuration of learning and teaching will shift, along with new ways of supporting students. The conventions and courtesy of NSS will be swept aside. Questions will be asked of institutions in terms of the quality and resilience of their on-line, digital elements. Students will not accept simply being offered less teaching, without the reciprocal of fully digitised and supported learning. There will also be fee implications, with students disinclined to pay more, or the same, for what is perceived to be ‘less’. While universities will strive to underwrite and guarantee quality, they will be faced with the immediate task of shifting curriculum bulk to digital formats. This is a time-consuming and resource-draining task and should be an area of funding intervention by government. There are big price ticket implications around technology, infrastructure and staff development. Experts in the field have already drawn the distinction between institutions’ willingness to shift to digital platforms and those with the capacity and funds (Tim O’Shea, Sunday Times, 26 May 2020) . And all institutions start from different points on the spectrum of design and delivery.
Very quickly, some students will compare offerings and migrate. Universities with impressive facilities and platforms will become hotspots. Those slower to react will suffer. Some students might postpone entry until robust systems are in place. And for those students sponsored by employers, the interrogation will be keen. The evidence that lower-income students suffer disproportionally in circumstances of change will cause universities to have concerns for both support structures and community engagement. Again, the case for government support is strong.
Universities are clinging still to the prospect of completing the current year and starting AY 2020-21 in the Autumn, even if it is initially a virtual start-up. Existing students have to be given awards and new students encouraged to apply. Universities will be keen to promote creative ways of engaging students in order to attract applications, protect revenue and build sustainable growth. It is a dual mandate, with self-protection co-existing with paramount concerns for the student experience, staff and infrastructure. However, if universities prioritise the ‘here and now’, their perspectives will fall short. Universities need to anticipate the wider effects of the restoration of activity. It will not be a simple resumption as certain fundamentals will have changed, short and longer term. Universities recovering more quickly and going on to thrive in the future will be those which have re-thought and re-calibrated strategic plans.
If there is a delay beyond September, then universities will have a serious revenue gap, from which some may not survive. Many have little by way of accumulated reserves and poor prospect of asset disposal. It will be difficult to remove significant cost in the short term, beyond jobs’ freeze and cuts to part-time and possibly contract staffing. Consumables will take an early hit: and the effect could be to make the student experience a little more shabby. Will there be bridging finance from government and how do universities access this? Presumably, it will be on the basis of having a credible and current business plan in place and which has taken account of the changed circumstances. Successful applications will depend on a convincing business case.
Recognising and understanding this new reality will be fundamental to universities’ ability to put dedicated management information systems in place, decide what needs to be done, design adequate responses and deliver effectively. They will have to co-exist recovery and growth plans. The needs of the economy, and the impatience of government, may be such that change is imposed rather than awaited. Here we are in the territory of forced mergers.
Currently, speculative planning does not take account of worsening situations, either virus recurrence or, dramatically, full-scale pandemic escalation. These latter scenarios would be devastating in terms of impact and would be revolutionary in respect to if and how the university sectors could respond.
How do universities move from short-term recovery, responding to the interruption in activity, to planned growth and development and which takes full account of the permanently changed circumstance? There is already acknowledgement that the flexibility and entrepreneurial instincts of universities will be valued assets in all recovery phases, from immediate to reconstructive. However, there is an atmosphere of uncertainty, trepidation even. With potentially fewer students around and the demands of new investment in learning and teaching, the universities’ sector is not independently viable, as currently structured.
At the same time, a combination of revenue shortfall, at least in the early stages if students do not return in September, and more sustained market re-orientation or dislocation could see more government money channelled towards universities. But there could be reciprocity. The outcome could be enhanced government influence, nudging toward control, in strategic planning, governance and targetted operations. The Scottish Government has form already in this area, with the ill-conceived report by Prondzynski (2013) a land-grab for control of university governance.
The timing of restart will be significant. As will the fact that it will certainly not be simply a linear resumption. Some reduction of the potential catchment/cohort may be expected ie some students/entrants will drift away, finding options other than HE and including ‘returning’ students who may not return. Some students may be ‘stolen’ by desperate universities (having lost their international share they might bulk up on domestic students) and the effects felt right down the ‘food chain’.
Given the disruption described above, new marketing and recruitment plans will be necessary immediately. Modelling new realities will extend beyond the conventions of teaching and learning and include a re-shaping of other, commercial income. Conferences, catering and residences will be depressed and if international activity is resumed it will be at a very restricted level. It is possible that this an area of most severe dislocation, loss and write-down. There has already been considerable media discussion on the dependence of even elite universities on Chinese income, funding cross-subsidy of teaching and research as well as glossy capital projects. And universities have been magnets for off-balance sheet investment in, particularly, residences by private capital. Like ‘snow off a dyke’, it will disappear, making the HE package in the UK less attractive in the international market.
The future shape of universities will change, a direct response to changed markets, government priorities, employer concerns etc. Successful universities will plan for this. That planning has to start now and with a focus on the components of future revenue and the design of new curriculum and learning platforms. There will have to be investment and at considerable cost. This is where government should indicate its willingness to help beyond
short-term bail-outs and promote the production of information from universities to guide the orientation and scale of financial assistance and encouragement.
Professor Bill Wardle
WAW Consulting Ltd
1 May 2020