What does Christmas shopping have to do with higher education?

For the time being, John Cater is the longest-serving Vice-Chancellor in UK higher education, having held his current post for approaching 32 years. He hands over the reins at Edge Hill University at the end of January 2025. In the blog below he finds parallels between what is happening in the high street and in the university sector…

This week Mark Allen, the Chief Executive of Land Securities, announced that his company had paid £490m for a 92% stake in Liverpool One, the shopping centre. In quotes, he explained that the top one per cent of UK retail shopping destinations provide access to 30 per cent of all in-store retail spend, “which is why we continue to see brands focus on fewer but bigger and better stores in the best locations”.

You may well ask, ‘What has this to do with higher education?’ First, there is a tangential link, in that Mark Allen is a former Chief Executive of Unite Students, the sector’s largest housing provider and a company that has, indeed, sought to maximise access to student residential spend and in the ‘best’ locations, typically cities with universities that are part of the perceptual elite.

But are we seeing this in higher education too? Any graph of higher education participation since the removal of the student number cap in 2015 has seen an increasing bifurcation between high-tariff institutions and, initially, low and, more recently, mid-tariff institutions. If you’re in the latter categories and you look at the 2024 intake data, the new cohort is in the sector, just not, in all probability, in your institution.

So, are we seeing Land Securities’ retail revolution, a race to the best locations, a clear focus of demand, in higher education? A decade of ‘spending’ decisions by each new intake, their friends, families and schools and colleges – ‘where do I go to draw down my loan?’ – says so. The UCAS 2024 End of Cycle data, as ever ably summarised by David Kernohan for Wonkhe, makes it clear that “higher tariff providers have been fishing in deeper waters”, with both lower tariff offers and a more flexible approach to clearing. And this is clearly understood by those making ‘purchasing’ decisions, with the exponential growth of self-release highlighting (perceived) trading-up.

With no constraints on an institution’s numbers, this trend appears inexorable, whilst a constraint on numbers would constitute a significant reduction in choice. There may be a middle road, a managed market, with limitations on the pace of growth, possibly determined by discipline, but the howls of protest would reverberate, particularly in elements of the media, constituency postbags and selective schools. And, whilst the Department for Education has indicated that it is no longer using Russell Group entries as a measure of a school’s success, the Treasury has yet to mirror that action.

The crunch is coming. With very few exceptions, university sustainability depends on two variables, number and price. The failure to secure, at least to date, a five-year index-linked settlement has curtailed price, and, with it, investment and forward planning. And a broadly static market, with no signs of an increase in all-age participation, is reflected in curtailed demand and fewer numbers.

From 2030 the age cohort declines by one-sixth. Demand for traditional higher education is broadly static and increasingly differentiated by tariff. Innovation, be it Lifelong Learning or apprenticeships, has yet to grip the market.

In retail investment has headed in two directions, niche providers in up-market ‘village’ style communities, whilst the big city retail brands, such as those in Liverpool One, acquire floor space and greater market penetration. Quoted companies pay nine figure sums for a piece of the big city pie, whilst non-niche players, the poor, the periphery, the ‘red wall’ towns, suffer.

Is this relevant to higher education? I believe so. Demand for higher education is broadly static and increasingly concentrated in a smaller number of providers. In-migration is severely constrained and the number of UK-resident eighteen-year-olds is heading towards a cliff edge.

I have written previously on the possible shape of higher education in the coming decade. Trifurcation: a three-way split. A perceptual elite offering three-year away from home residential degrees. Sub-regional providers closely tied to further education, anchor institutions in their communities. And, a (re-) emergence of global online players in the education marketplace, with strong brands and an almost uncapped resource; providers with the capacity, largely unfettered, to shape opinions and behaviours on whim.