Universities In Crisis

[00:00:00] [SPEAKER_00]: The Why Curve, with Phil Dobbie and Roger Herring.

[00:00:35] [SPEAKER_02]: So, is the crisis really that bad? Is it reaching so they say?

[00:00:39] [SPEAKER_02]: I mean, talking about this for a while, I'm with it. It's a sector that's struggling.

[00:00:43] [SPEAKER_02]: Yeah. I guess it's, I mean, the pandemic obviously made people quite...

[00:00:47] [SPEAKER_02]: First of all, people weren't going to university and then made people question actually their future.

[00:00:51] [SPEAKER_01]: Well, there was a lot of this thing coming from the government, the last government, I should say, about the value of degrees,

[00:00:56] [SPEAKER_01]: which we touched on before, when in fact, last time we spoke to Chris Millwood who we're going to speak to in a minute.

[00:01:01] [SPEAKER_01]: But it's the sense I think that people are turning away from it. The numbers are just fractionally, but they have now gone down.

[00:01:07] [SPEAKER_01]: Those who are actually applying. They look at it and they say, well, look, I could get an apprenticeship.

[00:01:11] [SPEAKER_01]: I could just get a job and get some training on the job.

[00:01:14] [SPEAKER_01]: Oh yeah, that's not a problem then. Is it, there's fewer people going to university?

[00:01:17] [SPEAKER_02]: We're just for the universities.

[00:01:18] [SPEAKER_02]: Well, yeah, it is, but we don't need as many of them. There's not a million people going.

[00:01:21] [SPEAKER_02]: Some of them, you know, some of them might go to the wall and we just go well, that's a shame.

[00:01:26] [SPEAKER_02]: And we're remembering that every single, you know, all those politics, they became universities.

[00:01:31] [SPEAKER_02]: We sort of mushroom the numbers of universities that they were.

[00:01:34] [SPEAKER_02]: And the number of people going.

[00:01:35] [SPEAKER_02]: So if we take a step back and we lose that, I don't, do they become more vocational type places rather do, do politics go about,

[00:01:44] [SPEAKER_02]: do universities go back to being politics?

[00:01:46] [SPEAKER_01]: I'm sure they never go back to the name, but because they would see that as a movement.

[00:01:49] [SPEAKER_01]: They could be some technical colleagues as well sort of ways they could go.

[00:01:52] [SPEAKER_01]: But the problem that they have still the financial, massive financial state,

[00:01:55] [SPEAKER_01]: you know, you can't turn the ship around that quickly.

[00:01:58] [SPEAKER_01]: And what you're not getting is there's many foreign students and they have been the dirty little secret.

[00:02:01] [SPEAKER_01]: It was actually funding our universities for a long time.

[00:02:04] [SPEAKER_01]: Yeah. And there's not as many one to come anymore.

[00:02:06] [SPEAKER_01]: Well, then possibly even less now you would have thought, that's very good.

[00:02:09] [SPEAKER_02]: Well, do you want to go to?

[00:02:10] [SPEAKER_02]: Yeah, if you're telling me every British.

[00:02:13] [SPEAKER_02]: So, well, okay, so how does it all end up then, I guess?

[00:02:16] [SPEAKER_01]: Well, the big thing is, is the government going to do anything financially to support the university.

[00:02:21] [SPEAKER_01]: Yeah, and that's highly unlikely given obviously the big black hole that we've been told exists in the nation's finances.

[00:02:27] [SPEAKER_01]: But then they need a different model because they can't put the fees down even though as I say people coming up,

[00:02:32] [SPEAKER_01]: massive loan issues at the end of the...

[00:02:34] [SPEAKER_01]: I mean, one people that go to university, that's the thing.

[00:02:37] [SPEAKER_01]: I mean, some people that go to university, we don't, I mean if we want everyone to go to university

[00:02:40] [SPEAKER_01]: because in a sense, then the whole idea of universities differently, where otherwise be.

[00:02:45] [SPEAKER_01]: Yeah, which is somewhere where essentially you're dealing with things,

[00:02:48] [SPEAKER_01]: it's not, you know, it should university be teaching how to make things or how to do stuff.

[00:02:53] [SPEAKER_01]: Or should it be how to teaching out of that?

[00:02:55] [SPEAKER_02]: Well, I just, well, teaching how to think, I think, is the thing.

[00:02:58] [SPEAKER_02]: I mean, your brain is still developing, I'm not a scientist, but it seems like an 18 to 21.

[00:03:02] [SPEAKER_02]: Yes, just using your brain.

[00:03:04] [SPEAKER_02]: You're saying, okay, I'm a man at 60 years and got the brain power of a 21 year old,

[00:03:09] [SPEAKER_02]: because it's still the...

[00:03:10] [SPEAKER_02]: Which particular 21 year old would be?

[00:03:12] [SPEAKER_02]: I'm a very bright 21 year old, but you're still developing your brain capacity at that age.

[00:03:18] [SPEAKER_02]: Yes, surely.

[00:03:19] [SPEAKER_02]: In a way, does it matter?

[00:03:20] [SPEAKER_01]: So long as you're still educating yourself.

[00:03:22] [SPEAKER_01]: Maybe, but it certainly matters to the university, because they've got to keep going in some form with the money they can get,

[00:03:28] [SPEAKER_01]: where they're from, for instance, students here or in the, in the government.

[00:03:32] [SPEAKER_01]: Let's bring us around to talk about all this who knows about it and that's Chris Millwood,

[00:03:36] [SPEAKER_01]: Professor of Practice in Education Policy, the University of Birmingham and Chris, welcome back.

[00:03:41] [SPEAKER_01]: You're with us two years ago.

[00:03:42] [SPEAKER_01]: We were talking about the idea of degrees and what degrees is valuable.

[00:03:45] [SPEAKER_01]: Now I think really it's a different kind of situation, which is regular headlines about the crisis.

[00:03:52] [SPEAKER_02]: Or even the university's existing.

[00:03:53] [SPEAKER_02]: On his next sample, I'm looking at the office for students and your report in May this year,

[00:03:57] [SPEAKER_02]: the FT reported that 40% of England's universities expected to be in a deficit in the 20, 20, 20, 20, 24 academic year,

[00:04:04] [SPEAKER_02]: within increasing number, showing low levels of cash flow and a significant number,

[00:04:09] [SPEAKER_02]: will have to make changes to their funding model this year.

[00:04:12] [SPEAKER_02]: But I mean, what changes can they make so quickly?

[00:04:15] [SPEAKER_03]: Okay, so yeah, you're right to highlight the office for students report that's the university regulator

[00:04:20] [SPEAKER_03]: and they are really the most authoritative source of financial information on universities,

[00:04:27] [SPEAKER_03]: because they collect all the financial forecasts and they did indeed say that 40% will be in deficit this year.

[00:04:34] [SPEAKER_03]: And that would increase if the growth forecasts they have for student numbers, you must have student numbers, aren't achieved.

[00:04:43] [SPEAKER_03]: I think being in deficit for one year is not in itself a crisis situation.

[00:04:49] [SPEAKER_03]: The key question is how you move out of that.

[00:04:53] [SPEAKER_03]: Are those basic levels?

[00:04:55] [SPEAKER_03]: Are they reducing your costs and improving your income like in any other business?

[00:05:03] [SPEAKER_01]: And dealing with the overall issue, which I also saw some stats saying that for the first time I think for a long while,

[00:05:09] [SPEAKER_01]: the number of student applications be actually wanting to go to university has actually dropped, not by huge amount but by some.

[00:05:16] [SPEAKER_01]: I mean, that is a worrying indicator if you're trying to work out your final question.

[00:05:19] [SPEAKER_02]: But also, what you're saying about reduced costs and improving income, well, first of all, if you're getting less people coming in,

[00:05:24] [SPEAKER_02]: you're getting less income unless you put your prices up and reduce costs means that it's never good as it means you're producing a poorer product to the end of it.

[00:05:32] [SPEAKER_03]: Not necessarily, so you will see stories across the sector about universities deciding to stop running some courses.

[00:05:43] [SPEAKER_03]: So they will be making decisions about subjects.

[00:05:47] [SPEAKER_03]: They think are sustainable in the long term and others that are not.

[00:05:51] [SPEAKER_03]: That's not necessarily great thing for the country because there are plenty of subjects we want to be sustained across the country because they're important.

[00:06:00] [SPEAKER_03]: But that's the obvious way in which universities at the moment are seeking to reduce their costs.

[00:06:05] [SPEAKER_02]: These are these are the infamous Mickey Mouse courses that they're not necessarily, actually, no, not necessarily.

[00:06:10] [SPEAKER_03]: I mean, I think there's very high levels of demand in areas like business studies and, I mean, there is like communications and media that some parts of the meat, the press might label Mickey Mouse courses.

[00:06:22] [SPEAKER_03]: It can often be, and we'll often be courses with relatively small numbers that have to be closed because they're not viable. You don't have the critical mass and it great example of that will be languages for example.

[00:06:34] [SPEAKER_03]: So it's definitely not necessarily the Mickey Mouse courses that are the ones that get closed in the climate like this.

[00:06:42] [SPEAKER_03]: The better off universities are, the more they're able to maintain a broad portfolio of subjects.

[00:06:47] [SPEAKER_03]: And essentially cross subsidized subjects that might be valuable might be important to people, but don't necessarily make it. Don't necessarily cover their cost.

[00:06:55] [SPEAKER_01]: Let's talk about the climate you mentioned in a climate like this. I mean, the climate is, the problems they have are the costs to students who might apply or young people who might be thinking of either doing a course building up a substantial debt or going straight into work where perhaps they will be getting some training on the job.

[00:07:15] [SPEAKER_01]: And we don't have to have that kind of thing behind them. I mean, that's an argument that the university sector does not seem to be winning at the moment.

[00:07:22] [SPEAKER_03]: I'm not, I'm a little more positive about demand for education than you have been so far. So my understanding of the current situation for UK students is that numbers haven't been growing to the same extent. They were for the 10s, 20 years before that.

[00:07:42] [SPEAKER_03]: But because the young population, the group of 18 year olds that most likely to go to university, will continue to grow for another couple of years even if the proportion doesn't grow or indeed decline slightly the numbers will at least be maintained.

[00:07:58] [SPEAKER_03]: So I'd be surprised if you ultimately see fewer numbers of young people going into university from the UK this year, although you're not seeing the growth that you've seen previously.

[00:08:08] [SPEAKER_03]: And there's probably a couple of reasons for that. One is the cost of living, so it's costly to go to university regardless of the fee levels, which we should talk about at some point.

[00:08:18] [SPEAKER_03]: And I may well be deterring students from at least going now. It doesn't mean they won't go in the future.

[00:08:25] [SPEAKER_03]: And they may also be thinking, well there are other options I'd like to explore before I decide to do this.

[00:08:33] [SPEAKER_03]: Go job travel, take an apprenticeship subject to good apprentices being a man.

[00:08:39] [SPEAKER_02]: University's a long time ago used to make a lot of money from research, didn't they? I mean teaching was almost a sideline in some universities and they were getting money.

[00:08:48] [SPEAKER_02]: I guess from industry, when there's well as from from government for funding that research has that sort of gone by the by the way now or is that still significant for in some universities that's still a significant part of their income.

[00:09:00] [SPEAKER_03]: And could we do more of it? Yeah. So research is still a, research is still a massive component of higher education in the UK in our system, unlike some other countries.

[00:09:13] [SPEAKER_03]: Most of the research is done in the universities rather than private, separate research institutes.

[00:09:19] [SPEAKER_03]: We have four of the top ten universities in the world, which is really driven in most rankings, which is driven by research performance.

[00:09:28] [SPEAKER_03]: And a very substantial proportion of activity in research intensive universities in bodies like the Russell Group will be for research.

[00:09:38] [SPEAKER_03]: So many other universities will have strength in research. I'll be not necessarily comprehensive across the university.

[00:09:45] [SPEAKER_03]: There is no, there hasn't been a reduction in research funding or indeed research activity it continues to increase, but the key is who research does not make.

[00:09:53] [SPEAKER_01]: So there's no money really comes into you, but she's from research they do is what you're saying.

[00:09:58] [SPEAKER_03]: They're it's funded, but most research makes a lot. So in the future, the government, the government does not cover the full costs of research.

[00:10:07] [SPEAKER_03]: If you've got a ground from one of the publicly funded research councils, you get 80% of the full cost.

[00:10:15] [SPEAKER_03]: If charities fund research and we have fantastic huge charities like the Wellcome Trust in this country, they they're kind of much less of the cost that in Pani over heads.

[00:10:24] [SPEAKER_03]: And industry may well cover the full cost, but on the whole I think universities that they think they cover about 60 to 70% of their costs on research.

[00:10:36] [SPEAKER_03]: So research is a really important part of the business. It has massive benefits for the country in terms of its commercial and public service applications as well as just the basic foundations of knowledge and the reputation of this the education sector and countries are whole, but you don't make money out of it you make up.

[00:10:53] [SPEAKER_02]: But somebody probably is down the track aren't they so it's like the research is done the university makes a loss on it.

[00:11:00] [SPEAKER_02]: It gets commercialised by a company that makes a mothsa and the university is thinking oh hang on we did a lot of that work.

[00:11:06] [SPEAKER_02]: I mean, is there, is there a case that they perhaps need to be a bit more strident in their commercialisation of their research?

[00:11:12] [SPEAKER_03]: I think there's been a lot of work to done over the last 20 to 20 to 20, 30 years to really push forward the commercialisation research.

[00:11:20] [SPEAKER_03]: The UK is often criticised compared to the US for example about it's often said we're brilliant at research but not so good at commercialising it.

[00:11:29] [SPEAKER_03]: And as a nation there's certainly more we can do on that and you need a good relationship to in government industry and universities to make that happen.

[00:11:37] [SPEAKER_03]: And many people would think that government policy hasn't pushed hard enough and industrial strategy that would make that happen over the last 10 to 20 years.

[00:11:47] [SPEAKER_03]: But even then, researching universities where whatever country you're in is generally lost making it seem to be more of a public good, creating knowledge and that's why governments fund it.

[00:12:00] [SPEAKER_03]: The university is generally paid for their research through students.

[00:12:04] [SPEAKER_01]: Right and students of course are the basis, I mean just to get the financial model that we said that research is not a revenue provider for universities.

[00:12:14] [SPEAKER_01]: So as we sit now, the university's get their money from the fees of domestic students and overseas students, that's the model, that's it.

[00:12:23] [SPEAKER_03]: Absolutely and of course the key issue for the current financial problems is more and more of that money has come through fees rather than government grants.

[00:12:36] [SPEAKER_03]: So we're aligned on domestic students paying fees, back by government loans and international pet students paying fees.

[00:12:42] [SPEAKER_03]: The domestic students fee has been as only increased once since 2012 by 250 pounds.

[00:12:50] [SPEAKER_03]: So what was a fee worth 9,000 pounds in 2012 is in real terms now worth 6,000 pounds.

[00:12:56] [SPEAKER_03]: So there's a lot of third of its value for it.

[00:12:58] [SPEAKER_02]: Even though people are saying, well it's too much, you know, in the current circumstances, even though it's come down quite so much is being used as a reason not to go to university because the fees are so huge.

[00:13:08] [SPEAKER_02]: And people are worried about that.

[00:13:10] [SPEAKER_02]: I guess as you've heard of this, the debt has got the interest rate on the debt is, yeah.

[00:13:15] [SPEAKER_03]: Yeah, so it would be more perceptions of debt and this is not bank debt.

[00:13:20] [SPEAKER_03]: This is protected government debt where you propose a percentage of your salary above the certain threshold.

[00:13:26] [SPEAKER_03]: But nonetheless, that's a serious issue paying that part of your salary over a very long period of your lifetime, which is recently extended from 30 to 40 years.

[00:13:35] [SPEAKER_03]: So that's definitely something that makes people think very hard about whether they want to do it.

[00:13:39] [SPEAKER_03]: But actually it's the upfront cost of living that is a more immediate barrier because, because that's not about something you're paying the future.

[00:13:46] [SPEAKER_03]: It's about some you pay now. You get a maintenance loan but often it's not enough and that can be a much more tangible.

[00:13:52] [SPEAKER_01]: I mean, obviously as far as the university is concerned, the benefit they get from the fees, from domestic students, you know, as you say, hasn't risen in the terms that perhaps it needed to keep up with the cost of the university's incur.

[00:14:04] [SPEAKER_01]: What proportion comes from overseas students? I mean, is it right to say that the vast majority of funds that the university's in Britain get are from fees from overseas students?

[00:14:16] [SPEAKER_03]: Not that not the vast majority.

[00:14:21] [SPEAKER_03]: So, so the key is but it's changing all the time.

[00:14:26] [SPEAKER_03]: So if you look at the forecasts that universities have put forward for the next five years, they're projecting that the international students will increase by about a third.

[00:14:38] [SPEAKER_03]: Whereas UK students, they're projecting will increase by much less.

[00:14:42] [SPEAKER_03]: And so international fees will become a more and more substantial element of their funding than they are now. And that's in a context where international student numbers have gone up by about 250% over 20 years, whereas domestic students have gone up by about 20%.

[00:15:01] [SPEAKER_03]: So the sector is becoming more and more reliant on international students.

[00:15:04] [SPEAKER_01]: So from what I'm hearing, certainly anecdotally, the numbers of foreign students is not necessarily meeting the projections that people wanted.

[00:15:13] [SPEAKER_01]: That actually there's been a thing a little bit of a downturn, is that true?

[00:15:16] [SPEAKER_03]: Yeah, so that's right.

[00:15:19] [SPEAKER_03]: So the sector has become basically rely on international students to cross subsidize research and the to meet teaching of UK students.

[00:15:28] [SPEAKER_03]: International markets are inherently more volatile.

[00:15:32] [SPEAKER_03]: The numbers are much less reliable, and there has been substantial growth in some countries like India more recently, Nigeria, but for countries like that, the numbers can be very affected by immigration policy, for example, and the guy at the hospital,

[00:15:48] [SPEAKER_03]: the Horkash Act, to student immigration. So certainly Indian numbers from India looked to be slightly down this year.

[00:15:58] [SPEAKER_03]: Many universities didn't recruit to what they expected last year.

[00:16:04] [SPEAKER_03]: And so this kind of source of funding that's been used across subsidized everything else has become an increased me answer.

[00:16:10] [SPEAKER_02]: And you say, you know, it's maybe it's a short term thing in terms of, you know, the losses that they've been made this financial year.

[00:16:16] [SPEAKER_02]: But that article in the F.T. that was reporting on that, students annual report that I mentioned at the beginning, it says the Russell group of elite institutions estimate the universities are losing two and half thousand on average per student and that figure is that to rise to five thousand by the end of the decade.

[00:16:35] [SPEAKER_02]: And I guess that is, and I guess that is because of what you're saying the prices aren't going up. The fees aren't going up.

[00:16:42] [SPEAKER_03]: Yeah, in any business, if you're not able to put your price up, then you're going to lose more and more money as inflation increases and of course we've experienced in recent years very substantial increases to inflation.

[00:16:56] [SPEAKER_03]: So that is really not a sustainable situation. The financial problem is going to get worse and worse.

[00:17:01] [SPEAKER_02]: But it sounds like the elasticity of that sounds like if you put the price up too much, then you're going to get fewer students because you're going to accendrate that issue about people going well that means more debt and you really don't want to be put into that situation.

[00:17:11] [SPEAKER_01]: I mean, actually the model doesn't work.

[00:17:13] [SPEAKER_01]: I mean, that's what that's the conclusion, the financial model doesn't seem to work.

[00:17:17] [SPEAKER_02]: Well, in need to be balancing, doesn't there, which might mean fewer university classes?

[00:17:20] [SPEAKER_03]: Yeah, so the fact, so I mean, firstly on the price of the last this point is actually far from clear that if you invest these raise up from fees that will post students off.

[00:17:29] [SPEAKER_03]: If you're a very selective, highly breasted just university, look at the case of the states.

[00:17:34] [SPEAKER_03]: They try to vary very high levels of fees and it doesn't post students off because because the brand value of having a degree from that university is so substantial.

[00:17:43] [SPEAKER_03]: Yeah, and I think in the way our system works, students recognize that the price is not the front fee.

[00:17:47] [SPEAKER_03]: It's what they pay back in terms of debt over time, which will let's monitor their salary than the amount they paid in the fee.

[00:17:54] [SPEAKER_03]: So the probably is some elasticity in terms of where the fee could go.

[00:17:59] [SPEAKER_03]: I think not withstanding that it's politically challenging for a government to want to do it.

[00:18:05] [SPEAKER_03]: For what you said earlier, that the fees are already perceived to be high, particularly at a relatively some other countries in Scotland, the Renovies tall.

[00:18:12] [SPEAKER_03]: So it's not advertising for any government to want to increase that.

[00:18:15] [SPEAKER_02]: But is it the big name universities that are actually suffering the most or is it going to be the smaller universities?

[00:18:22] [SPEAKER_02]: So formal techniques many of we so if you study geography at had us field or you're thinking of it, would you do that if the fees were too high?

[00:18:31] [SPEAKER_02]: You might say, well no, where has if you are studying economics at LSE, you'd go, well this is, you know, yeah, this is prestigious.

[00:18:40] [SPEAKER_02]: It's worth paying the money.

[00:18:42] [SPEAKER_02]: I also can look at the numbers and go, well, a lot of them find jobs in the in the Bank of England paying very high salary.

[00:18:47] [SPEAKER_02]: So yes, I'll do that thanks.

[00:18:48] [SPEAKER_02]: Yeah, so it's you know there's a clear path and people will spend the money but if they don't, they won't.

[00:18:54] [SPEAKER_03]: Yeah, and competition is one dimensional of this.

[00:18:57] [SPEAKER_03]: So there's three dimensions to the problem.

[00:18:59] [SPEAKER_03]: One is we're more and more aligned on fees in higher education and the fee is not covering its costs now.

[00:19:08] [SPEAKER_03]: The second is we're more and more global in higher education and that's volatile.

[00:19:14] [SPEAKER_03]: And because the fees and the domestic fees not per week cost we were we're aligned on that cross-obsides everything else.

[00:19:19] [SPEAKER_03]: The third element is that there's much greater competition in the worst 20 years ago.

[00:19:24] [SPEAKER_03]: So we have a very competitive system that's been built into the system,

[00:19:28] [SPEAKER_03]: regulation encourages competition between institutions and that means there are more winners and losers.

[00:19:33] [SPEAKER_03]: And as you said, although the most selective universities, the ones that figure highest in the lead tables,

[00:19:41] [SPEAKER_03]: the ones that have the highest research profile, may suffer most from research not covering its costs.

[00:19:47] [SPEAKER_03]: They're generally always going to be able to recruit students.

[00:19:50] [SPEAKER_03]: I've made many of them did increase student numbers over the last 10 to 20 years which means some others have been squeezed.

[00:19:57] [SPEAKER_03]: So it's probably another part of the centre where you're probably going to see the greatest vulnerability.

[00:20:02] [SPEAKER_01]: Okay, so I mean a ball question, do we have too many universities overall in this country?

[00:20:10] [SPEAKER_03]: I don't think we have too much higher education.

[00:20:13] [SPEAKER_03]: I don't think too many people are going into higher education.

[00:20:18] [SPEAKER_03]: I do think to to great a proportion of our education happens through young people studying full time for a full degree between the ages of 18 and 21 or 22.

[00:20:29] [SPEAKER_03]: It's a very traditional, expensive way of doing it.

[00:20:35] [SPEAKER_02]: This was a conclusion from last time we spoke to you.

[00:20:38] [SPEAKER_02]: Yes, so you need to point that people should go to university later rather than earlier.

[00:20:42] [SPEAKER_02]: You might be able to fund themselves.

[00:20:43] [SPEAKER_01]: But that's a longer term thing of changing the pattern perhaps.

[00:20:46] [SPEAKER_01]: The immediate situation Chris, I mean we've certainly heard suggestions that some institutions simply are going to go bust.

[00:20:54] [SPEAKER_01]: I certainly heard that from friends of mine in the higher education area saying that they think there are some that either have to amalgamate or disappear or do something or even go bankrupt.

[00:21:04] [SPEAKER_01]: I mean do you think that's that's likely we actually have to reduce the risk of reducing.

[00:21:07] [SPEAKER_03]: I don't think giving the way the regulation works and especially given what the new government has said about higher education being a public interest in universities that a university will be allowed to have a disorderly bankrupt.

[00:21:24] [SPEAKER_03]: If you just allowed a university to go bankrupt, it would affect the confidence in our education system worldwide.

[00:21:34] [SPEAKER_03]: It would also, and that would of course affect student choices about where to come to this country.

[00:21:39] [SPEAKER_03]: It would affect the rate of interest that universities have to pay banks for lending.

[00:21:44] [SPEAKER_03]: So I do not think that we will have a disorderly failure of a university in this country.

[00:21:51] [SPEAKER_03]: But amalgamation perhaps, I mean an orderly amalgamation.

[00:21:54] [SPEAKER_03]: Yes exactly. So I think the territory you're in if the finances get progressively worse because the fear roads further in real terms.

[00:22:02] [SPEAKER_03]: If demand doesn't increase and if some institutions are caught in a kind of volatile recruitment trap where you had to bear is some rationalisation.

[00:22:12] [SPEAKER_03]: So so you get into a territory of, I mean it possibly some merges.

[00:22:18] [SPEAKER_03]: You first use themselves deciding to rationalise that provision so they don't offer as much but they fix on areas that they can make sustainable.

[00:22:26] [SPEAKER_03]: Some deals done about universities offering some subjects and others picking up these subjects there no longer going to offer.

[00:22:32] [SPEAKER_03]: What you do need for that to happen though is some kind of oversight topic so it happens in an orderly way that protects the interests of the people and the places where universities are based.

[00:22:45] [SPEAKER_03]: So many universities have been arguing.

[00:22:48] [SPEAKER_03]: So there's a report by public first couple of weeks ago arguing that you need a kind of commissioner who would sit above the university system.

[00:23:00] [SPEAKER_03]: Have some money to support restructure and information to get a more sustainable sector possibly with fewer universities.

[00:23:09] [SPEAKER_01]: Have you been there by the office for students but boost that make it more statutory put it give it powers wouldn't that work within that.

[00:23:16] [SPEAKER_03]: So the office students does have powers in relation to financial sustainability and it is exercising those powers and it has fantastic insights on the financial position of universities.

[00:23:25] [SPEAKER_03]: The challenge it does have is that it's responsible for students so it's responsible for the education mission of universities and some people have argued for an independent education commissioner.

[00:23:37] [SPEAKER_03]: To oversee all of this so they will be able to embrace the many different things the university provides in a place you know it's provides nurses and doctors for the health service.

[00:23:47] [SPEAKER_03]: It can do research with industry and attracts jobs to a place through that route.

[00:23:53] [SPEAKER_03]: It has an estate which is used by the public in the place where it's based.

[00:23:59] [SPEAKER_03]: It's a great cultural asset so and it may well be that the earth has picks up that role if it's going to do that it has to be made explicit that this is about all the protecting student consumers.

[00:24:11] [SPEAKER_03]: It's about protecting the broader public interest in you.

[00:24:14] [SPEAKER_02]: Yeah exactly because if you rationalize so if you if had a spill and leads and Bradford.

[00:24:20] [SPEAKER_02]: It became how to fill leads Bradford University which which would be rationalization in that the just lose a couple of campuses wouldn't they get rid of a load of students.

[00:24:28] [SPEAKER_02]: So actually it just becomes lead to university ultimately you know that sort of rationalization sounds like it's going to get rid of people but if you and you might have to do that because because the the sums just don't work otherwise.

[00:24:38] [SPEAKER_02]: But if you are rationalizing like that you're going to lose a load of courses and somebody needs to be there to make sure that some courses across the country that don't just disappear so for example if we thought Japanese studies I don't know if there is such a thing but if Japanese studies were seen as being something important.

[00:24:53] [SPEAKER_02]: And we just lost it through closures and then all of a sudden it becomes very important to our political future or are you going to have a course if no one wants to study that's the problem.

[00:25:02] [SPEAKER_02]: I mean if people do want to study but they can't I might be a handful of people with a particular discussion and yeah but if it goes by the wayside because no one is getting any focus on it and there's no one over there to say well we still need to do that may not be very important but we need to keep my hand in it.

[00:25:20] [SPEAKER_03]: Yeah, so you need a national strategy and a regional strategy.

[00:25:25] [SPEAKER_03]: But it's a national level there are some things we need you know we need just enough provision of very specialist languages which will probably be delivered by quite specialist institutions like so as and specialist parts of institutions in places like Oxford and Manchester.

[00:25:43] [SPEAKER_03]: And that's very much a national interest and at a more local level you need somebody to train the nurses the midwives.

[00:25:51] [SPEAKER_03]: You need to make sure that if an institution closes it doesn't lose the anchor industry that's employing a lot of people nearby and collaborate with the university.

[00:26:03] [SPEAKER_03]: So so that's why it needs more than just a kind of cold hearted.

[00:26:09] [SPEAKER_03]: And protect the consumers, move the students to somewhere else point of view.

[00:26:14] [SPEAKER_03]: It needs a strategic view at the local and the national level about how to manage this change in a way that protects the public interest.

[00:26:22] [SPEAKER_02]: Could these universities be getting more commercial money as well? I mean even if it's just sponsorship rights for example you know for more for more buildings or you know do we need to do it.

[00:26:32] [SPEAKER_01]: Or even the American system is very much that you know you can actually have a Trump universe we won't go there but the the other variants that are possible is that.

[00:26:42] [SPEAKER_01]: We should be too sweet.

[00:26:43] [SPEAKER_02]: We should be too sweet.

[00:26:44] [SPEAKER_02]: I wouldn't go there if you.

[00:26:49] [SPEAKER_02]: But yeah, I mean that sort of thing but with the reputable brands for example.

[00:26:52] [SPEAKER_02]: Because you can see they'll be some benefit for these companies.

[00:26:54] [SPEAKER_03]: I think there's two levels to that. So one is universities have tried much harder than they used to raise money from donors in the way you do in the states.

[00:27:07] [SPEAKER_03]: And indeed a lot of very experienced fund raises brought over from North America to work in universities and all universities will be doing that and one for another.

[00:27:16] [SPEAKER_03]: But it's only really a few that can generate serious money from it because of their history and their brand and their standing.

[00:27:24] [SPEAKER_03]: But that's not necessarily sponsorship is that's like in diamonds.

[00:27:27] [SPEAKER_03]: Yeah, but you know look at most you know the most elite private universities in the states that's just going to bust in diamonds.

[00:27:34] [SPEAKER_02]: Yes, they're a very big Harvard University are at 50 billion.

[00:27:37] [SPEAKER_01]: Yeah, and they say, and I know friends of mine who applied various ways or the children have.

[00:27:41] [SPEAKER_01]: They are needs blind in a lot of these situations. So if they decide they want you, they have enough in their endowments to actually pay you through the university.

[00:27:52] [SPEAKER_01]: Now I mean I don't know that's on model that I think will be hard to introduce in the UK wouldn't it?

[00:27:56] [SPEAKER_02]: But why aren't they getting these in diamonds and were not? That's I guess that's the question is it because there must be a greater attachment over there.

[00:28:02] [SPEAKER_02]: Because these are obviously people who went to these universities, so I'm going to pay back money into them.

[00:28:07] [SPEAKER_03]: Yeah, so there's just a different relationship between the alumni and universities in the states.

[00:28:14] [SPEAKER_03]: I mean we're all attached to the universities we went to but we don't have the same culture of giving back to them that they do in the states.

[00:28:20] [SPEAKER_03]: We don't support the college football team in the same way that they do in the states.

[00:28:24] [SPEAKER_03]: So we have made pretty good progress on that but it's only a few universities that can really generate serious money out of it.

[00:28:31] [SPEAKER_03]: The other area that's very important in this territory is water employers paying.

[00:28:36] [SPEAKER_03]: So we as a nation don't invest in skills anywhere near enough or an education and the training of young people.

[00:28:48] [SPEAKER_03]: Our employment basis often for to be quite short term thinking in terms of that.

[00:28:55] [SPEAKER_03]: And we are not apart from some selective larger companies.

[00:28:59] [SPEAKER_03]: There isn't the same integration that you might see in some other places between companies and educational institutions with very long term investment from employers in skills development.

[00:29:10] [SPEAKER_03]: So I would have thought, you know if you're thinking about what's the way out of this.

[00:29:15] [SPEAKER_03]: There's probably a mix of things here which involve some latitude to enable at least an inflationary increase in the fee to avoid this constant erosion, which is not sustainable.

[00:29:28] [SPEAKER_03]: Universities themselves having to look at the efficiency of what they're doing and making some important steps to reduce their costs.

[00:29:39] [SPEAKER_03]: And here in view nationally and locally about some kind of restructuring and rationalisation to fit the environment we're now operating in with some public funding probably repayable to make that happen.

[00:29:52] [SPEAKER_03]: And then I would have thought this government will be looking for for some think contribution from employers as well with universities actively involved in that so more training happening.

[00:30:04] [SPEAKER_03]: Through funding with employers to a sense that happens with apprenticeships now and Labour has promised to free up the apprenticeship level to make it more of a broader apprenticeship and skills level that would enable different times of training not just very structured apprenticeships.

[00:30:17] [SPEAKER_03]: So you might see a world in which more students are getting some kind of funding from employers, which in itself would take you into that territory we're talking about before about studying like streamline.

[00:30:28] [SPEAKER_02]: On this Hammond for a long time in things like architecture for example you got like a sandwich course where you got engineering has been a longer than something.

[00:30:35] [SPEAKER_01]: But Chris one of the other aspects of this now I'm speaking personally having members of the family involved in the high education area.

[00:30:40] [SPEAKER_01]: There's an issue about how much you actually pay the academics because a lot of them has been a long time to just did that they know they can get far more money.

[00:30:50] [SPEAKER_01]: This is true the public sector more generally perhaps by going abroad, you know US universities pay a lot better than the UK universities I suppose the deal is if you're asking students to pay more to go to on a particular course

[00:31:03] [SPEAKER_01]: they'll want to know that it's a kind of course that has the prestige and the worth wellness that they get from attracting the best academics and that's going to be a difficult thing if you're trying to cut cost isn't it.

[00:31:16] [SPEAKER_03]: So I don't think I think it's is it's important not to generalize about the US and the UK because we're both very diverse there are some universities in the US that will pay a lot.

[00:31:29] [SPEAKER_03]: That are very prestigious research universities there's also a lot of other universities that won't.

[00:31:35] [SPEAKER_03]: So but it's definitely true at the top end that if you're a leading academic in the UK you will get offers to work in the US, Australia, elsewhere China now as well.

[00:31:46] [SPEAKER_03]: Where with much high salary and so you'll be thinking hard about that and that's not a new thing that's not associated with the current financial challenges.

[00:31:57] [SPEAKER_03]: More broadly we don't have a huge problem attracting academics we're trying to we're a group loads of academics from overseas because they want to come and work here.

[00:32:06] [SPEAKER_03]: I think the main challenge with academic careers is it's very insecure for quite a long period of time so you're often on short term contracts early in your career particularly for engaged in research which can put people off because they want more security from that.

[00:32:21] [SPEAKER_03]: So I think yes there's a serious issue is about paid bargaining which will be made hard this year because there's likely to be quite substantial public sector pay increase in universities will be.

[00:32:30] [SPEAKER_03]: I don't think stuff will be looking good.

[00:32:31] [SPEAKER_02]: Well why would it be less a government issue when you talk about it with like a funding but I mean there's still going to be demand there and if you can argue that's you know it's going to be more demand so we're looking at a piece that Peter Mandelson wrote in the time last week.

[00:32:45] [SPEAKER_02]: Basically saying that you know that we do need to educate people is the human capital that we can't ignore.

[00:32:52] [SPEAKER_02]: And then looking at some of the numbers about how many people we send off to university 58% of 25 to 30 of four year olds in the UK have got a tertiary qualification.

[00:33:01] [SPEAKER_02]: That's above the OECD average but if you look at places like Japan it's 67% Australia's got a target by 2050 of 80%.

[00:33:09] [SPEAKER_02]: Now that target of 80% perhaps make sense because you think about you know artificial intelligence and automation and how many jobs that are going to be done.

[00:33:19] [SPEAKER_02]: That the don't need very much human brain power we only need to get smarter because that's they're going to be the only jobs left so almost everybody perhaps you know there's an argument almost everybody needs to go to university.

[00:33:28] [SPEAKER_02]: Or fewer because some of the things skills you need are not going to be ones that you get from universities but you're going to have to but what is going to get your job is how you use your brain it's going to be less practical and more more brain power.

[00:33:41] [SPEAKER_03]: I mean I think the important word in what you quoted that was tertiary.

[00:33:45] [SPEAKER_03]: So tertiary means quite a broad range of post compulsory education embracing what we would call further education that happens in colleges as well as what we call home education.

[00:33:58] [SPEAKER_03]: But we should be doing it we should be getting exactly and I would say all of us need to be engaging with tertiary education of different kinds.

[00:34:07] [SPEAKER_03]: I think it is certainly the case that as we become a more service-led economy as technology influences work more cognitive skills are important and adaptability you know we've got to adapt to different.

[00:34:21] [SPEAKER_03]: In paratives in the workplace over a 40 or 50 year career and so you've got to have those cognitive skills but it doesn't mean that there are also some very important practical skills you align with it.

[00:34:33] [SPEAKER_03]: And that's why you need to think about a kind of tertiary system where there's more flexible types of learning happening throughout life rather than this we've all got to go for three years when we're 18 and that's it.

[00:34:45] [SPEAKER_02]: So if there are more people going I mean you at your point they could happen later but if we all ultimately do go at some point in our life on to tertiary education then that is a lot more than than coming so it's sort of like seeing twice as many.

[00:34:58] [SPEAKER_02]: And that would mean you get economies of scale which will help some of this these funding problems that we've been talking about.

[00:35:03] [SPEAKER_03]: And but it would require universities to operate differently to operate that to offer that much more flexible life long offer it's it's easier for universities to stack up.

[00:35:16] [SPEAKER_03]: Young UK students domestic international students you can get them piled into your whole residence you can offer campus services it's a it's a more it's a more economically successful model for them but if you're going to respond to that world we've all just been talking about people in work.

[00:35:34] [SPEAKER_03]: People studying later life you've got to operate much more flexibly and probably you've got to work more like your colleges and your employer partners do.

[00:35:45] [SPEAKER_03]: And so that will require some change in the configuration what we offer.

[00:35:48] [SPEAKER_02]: And the fun and take to would need to play in this as well to say well like a confusing mortgage for a few years if you're going off to the best I mean to stuff like that we need to think about you know all aspects of how.

[00:35:57] [SPEAKER_01]: And integrated funding.

[00:35:59] [SPEAKER_01]: Yeah, it seems unlikely but Chris I think we're after we're there but thank you so much for being with us.

[00:36:04] [SPEAKER_01]: And I'm sure you're university will keep going so don't worry about that.

[00:36:08] [SPEAKER_03]: We're in a good position where a strong institution so we're feeling pretty confident about that.

[00:36:15] [SPEAKER_02]: So the crisis that Rogers warning us about is perhaps he overplayed them well there could be some malagymetre we will see we will say anyway good stockers thanks Chris.

[00:36:23] [SPEAKER_02]: Okay and obviously next week we can't avoid talking about what is being very much the news this week all the riots that have been going on across the UK and the causes behind them.

[00:36:33] [SPEAKER_01]: Well name specifically by the Prime Minister as the far right now what does that mean.

[00:36:39] [SPEAKER_02]: I don't know well I think a lot of people don't think I think it's people who've got a union jack on their Twitter profile and he perhaps a union jack tattoo as well or an England flag which seems to be even more push on it.

[00:36:54] [SPEAKER_01]: But they sad isn't it the way now sort of associated our flight is.

[00:36:57] [SPEAKER_01]: It is but what are we talking about I mean is this a political movement is it just a few guys tanked up with a few slogans and a few too many beers throwing rocks up someone they don't like.

[00:37:08] [SPEAKER_02]: Is it what is the more to it that is it you know we talked about pop music where's the boundary between just being right.

[00:37:14] [SPEAKER_02]: Yeah and being the far right.

[00:37:15] [SPEAKER_01]: Exactly I mean you know we have reform MPs in parliament now are they far right are they not how does that relate to what's going on in the street.

[00:37:23] [SPEAKER_01]: What's between there's a lot of talk about people manipulating this online are they people scheming from a more political area we just don't know and then there's people who will deny that they are far actually and then they were say things that make you think oh no but you've just demonstrated that actually are far right.

[00:37:37] [SPEAKER_02]: We're building people in the far right can't agree on whether they are not obviously they're going to deny it because being used as a drug atry comment.

[00:37:46] [SPEAKER_01]: Is the conservative party in fact perhaps concerned that some elements would be on their far right.

[00:37:52] [SPEAKER_02]: We need to we need to look at this what it all means the boundaries of the far right we'll look at that next time and on the on the white care.

[00:38:01] [SPEAKER_02]: We've got what we are.

[00:38:02] [SPEAKER_02]: I do too many photos you know that yes and the white care next week we'll look at the far right we'll see you then thanks for listening.

[00:38:08] [SPEAKER_00]: The why.

[00:38:09] [SPEAKER_00]: That curve.