English higher education is heading into a future nobody planned,
according to a new paper from the Higher Education Policy
Institute written by Professor Sir Chris Husbands.
New Choices: Revisiting Futures for higher education in
England (HEPI Debate Paper 48) is a follow-up to an earlier
paper, Four Futures (HEPI Debate Paper 37) by the
same author from 2024, which set out four potential scenarios for
how the sector might resolve its financial challenges.
Two years on, Sir Chris argues that higher education faces
long-term strategic choices. The financial pressures previously
identified have arrived faster than expected and have been
compounded by three further disruptive forces:
- the rapid spread of generative AI into teaching and
assessment;
- a fundamental shift in student expectations, as more students
study from home, work part-time and manage mental health
pressures; and
- eroding public trust in the higher education sector's value
and purpose.
The report warns that England finds itself in an unplanned mix of
decline, quiet research concentration and stalled regional
reform, less stable than any of the original scenarios', and none
of it is being managed as deliberate policy.
The final chapter concludes: `The sector as it currently exists,
and institutions within it, are unsustainable in any plausible
funding model.'
The sector's current challenges include:
- The Office for Students projects 45% of providers
will be in deficit in 2025/6, with 45 holding fewer than
30 days of liquidity.
- Severance costs across the sector rose 71%
year-on-year to £303 million, and the academic workforce
shrank for the first time in over a decade.
- The 2025 rise in the undergraduate fee cap to £9,790
delivered a net gain of only around £18
million sector-wide once increased employer
National Insurance costs are factored in.
-
Generative AI use is moving faster than
institutional capacity to manage it, with strains on assessment
and teaching as a result.
- Public confidence is sliding: the proportion of Britons who
think a degree isn't worth the time and money has risen from
14% in 2005 to 34% today.
Given these challenges, the report sets out a possible future
typology for the sector, with a small number of globally
competitive research universities, a larger tier of
regionally-anchored institutions, more networked local'
universities increasingly working alongside private providers and
specialist institutions built around single disciplines or
distinctive teaching models.
Sir Chris sets out an agenda for individual universities and for
government. He argues universities need to ask hard questions
about their operating models, relationships with other
institutions and their place in their communities. Additionally,
he argues the new Government should articulate a vision for the
sector, with policy clarity on: funding for teaching; the
Lifelong Learning Entitlement; the contradiction between
international student policy and immigration policy; the future
shape of research funding; a rebalanced approach to regulation;
and a proper framework for orderly mergers and institutional
exits before failures happen.
Professor Sir Chris Husbands said:
Four Futures argued there were painful choices in
every direction. Two years on, the cost of not choosing is
demonstrably higher. Simply increasing income is no longer a
viable strategy for institutions and simply hoping the market
sorts itself out is no longer a viable strategy for government.
What the sector needs now is a combination of government activism
and institutional courage.'
