A new Report from the Higher Education Policy Institute shows reductions in student demand in England, which are already affecting the higher education sector, will cause serious problems as the number of 18-year-olds in the population declines after 2030.
Student Demand to 2035 by Bahram Bekhradnia (HEPI Report 179) finds:
- After steadily increasing over the past two decades, the participation rate in England – the proportion of young people choosing to go to higher education – has gone into reverse in the past two years.
- At the same time, after increasing between now and 2030, the size of the young population will decline sharply and, unless the participation rate were to resume its improvement, then overall demand for higher education would fall by getting on for 20% between 2030 and 2040, causing serious problems for much of the higher education sector.
- There remains a yawning gap between male and female participation. Given the fact that consistently 5% more boys are born than girls, it would take a 37% increase in male participation to match that of female. This startling fact, though, might be thought to provide some basis for hoping that the likely decline in student numbers may be mitigated – if males were to begin to catch up. However, the underperformance of males is a global phenomenon. In the OECD, the United Kingdom actually performs better than most other countries in this respect, so international experience does not provide any basis for anticipating an improvement.
- Whereas 20 years ago young people from the most privileged groups were four times more likely to go to university than the least privileged, that gap had halved by 2022. However, in the last two years that steady improvement has stalled. Nevertheless, if the improvement in the performance of the least privileged were to resume, then that could substantially mitigate the effect of the population decline.
- The fixed student fee is only one element of the cost of attending university. The other is the cost of living while at university. Whereas the real-terms cost of student fees has reduced, as fees for home students have not increased at all since 2017, maintenance support has not kept up with the rising cost of living, which may be having a negative impact on potential students.
- Many universities are already suffering student number reductions, partly as a result of the universities defined as ‘higher tariff’ by UCAS (including those in the Russell Group) – no doubt in a bid to maintain their income and compensate for the near 40% real terms reduction in the value of the fee – recruiting students who in the past would not have met their academic requirements and would have gone to ‘lower or medium tariff’ universities. Between 2013 and 2024, applications to ‘higher tariff’ universities increased by 40% while those to ‘lower tariff’ universities declined by 13%.
The report concludes that prospects for student numbers look highly uncertain. If there is no improvement in participation, then demand will reduce substantially after 2030 implying a very bleak outlook for many universities which will be exacerbated if some mechanism is not introduced to limit the ability of others to recruit students at their expense.
Bahram Bekhradnia, HEPI President and the author of the report, commented:
‘The reasons for the recent reversal of the increasing desire of young people to go to university need to be understood. It is unlikely to be because of cost – the cost of going to university has actually reduced in the past decade. It may be because of the increasing hostile environment fomented by the last Government and by some of the press. Or it may be a residual impact of COVID. Whatever the reasons, unless there is an increase in the desire of young people to go to university then the future looks very bleak for many institutions.
‘It may already be too late for some, but universities are an essential part of the national infrastructure, and for the sake of the country and for the sector as a whole, we need a body to safeguard the national interest. The Office for Students has shown no interest in peforming this role – indeed, that was not part of its remit when it was created purely to be a guardian of student interests – and it needs to be replaced or radically realigned. Some form of student number controls is required in order to ensure that perfectly good universities do not go to the wall because of the predatory – if understandable – behaviour of others.’
Notes for Editors
- HEPI was founded in 2002 to influence the higher education debate with evidence. We are UK-wide, independent and non-partisan. We are funded by organisations and higher education institutions that wish to support vibrant policy discussions, as well as through our own events. HEPI is a company limited by guarantee and a registered charity.
- Bahram Bekhradnia established HEPI in 2002, and was its Director until 2013, when he stepped up to become HEPI’s first President. Before establishing HEPI he was the Director of Policy for the Higher Education Funding Council for England (HEFCE) since its formation in 1992. Before joining the Funding Council, he spent his career in the Department of Education and Science (as it then was), leaving as an Assistant Secretary in 1991 to join the Universities Funding Council (later HEFCE).
Bahram very helpfully highlights the effect of demographic changes on the number of 18 year olds after 2030. However, as John Cope sets out in his separate blog, there’s no reason why this should mean a fall in the overall demand for higher education. Plenty of universities already don’t see 18 year old undergraduates as their major market, and are reshaping themselves accordingly (certainly that’s true for Cumbria, the one I know best). If more and more jobs do require higher level skills, and more and more people need to update their skills, then there should be some reasonable opportunities for higher education institutions going into the 2030s.
That’s a good thing, because I’m dubious about Bahram’s policy solutions, which can too easily be caricatured as “too many students want to go to popular universities, so we should make them go to unpopular ones instead, because otherwise the unpopular ones will be in trouble”. This sounds, even if it isn’t meant to, like special pleading with a vengeance. If HE can grow with rising demand, then it can shrink with contracting demand, and it probably should.
There are potential public interest arguments for limiting numbers in some institutions, but these would be about “studentification”, pressure on public services, lack of affordable accommodation for local people and (conceivably) evidence that students suffer if their institution gets too big. Similarly, it might not be in the public interest to allow a significant university to go out of existence without thinking very hard about the public investment that had gone into it, the effects on the regional economy, etc. But there are more than 400 HE providers on the OfS register; they aren’t all indispensable local anchor institutions. In general, the public interest is going to be best served by creating a sensible regulatory regime that doesn’t create perverse incentives (such as over-reliance on international students), and then leaving autonomous institutions to prosper, or fail to prosper, by offering things that learners and employers want.