How can the HE sector be future-proofed? Education Strategy How can the HE sector be future-proofed? Navigating the new landscape 13 June 2019 Draft

c.143 individual universities (+ others) Future-proofing the sector is a slightly different challenge than ensuring the survival (in a recognisable form) of each institution What are we trying to future-proof? The UK HE Sector c.143 individual universities (+ others) How can the HE sector be future-proofed? 2

c.143 individual universities (+ others) Future-proofing the sector is a slightly different challenge than ensuring the survival (in a recognisable form) of each institution What are we trying to future-proof? The UK HE Sector c.143 individual universities (+ others) International reputation for quality Driver of UK research Driver of workforce skills Engine for social mobility Individual brands Current (and future?) staff Local economic hubs Local learning and career opportunities Prospects (and stress levels) of current students How can the HE sector be future-proofed? 3

c.143 individual universities (+ others) Future-proofing the sector is a slightly different challenge than ensuring the survival (in a recognisable form) of each institution What are we trying to future-proof? The UK HE Sector c.143 individual universities (+ others) Forging a path to the future vs. Safeguarding our heritage How can the HE sector be future-proofed? 4

c.143 individual universities (+ others) Future-proofing the sector is a slightly different challenge than ensuring the survival (in a recognisable form) of each institution What are we trying to future-proof? The UK HE Sector c.143 individual universities (+ others) Forging a path to the future AND Safeguarding our heritage How can the HE sector be future-proofed? 5

Several challenges have emerged – but we’re going to focus on the threats to student volumes as the individual institution level Why are we worried? International competition Changing supply / demand ratio Competitive turbulence Funding changes (and reductions) How can the HE sector be future-proofed? 6

It is quite possible that a c It is quite possible that a c.10-15% gap will open up between supply and demand over the next three years Why are we worried? International competition Changing supply / demand ratio Competitive turbulence Funding changes (and reductions) Change in Demand – 3 years Change in Supply – 3 years UK Demographics -2-4% International volume (Brexit) -1-3% Shift to Apprenticeships -1% ? Growth in participation +1-3% Total -3-6% PBSA beds forecast +15% Shift from private rental 1/3 to 1/2 Total +7.5% - 10% How can the HE sector be future-proofed? 7

If this happens, then until capacity reduces (or demand grows) then there will be empty spaces at universities – but where? Why are we worried? International competition Changing supply / demand ratio Competitive turbulence Funding changes (and reductions) 10-15% gap…. = 30% of institutions 30% empty 40% of institutions 40% empty Will vary by… …region …subject …tariff level Can be managed by… …”winning” …extending the core …shrinking How can the HE sector be future-proofed? 8

Understanding where you are This raises the game for university senior leadership and governors, who will have to look harder for threats / opportunities What’s the challenge? Understanding where you are Spotting change Charting a course Course correction How can the HE sector be future-proofed? 9

Understanding where you are This raises the game for university senior leadership and governors, who will have to look harder for threats / opportunities What’s the challenge? Understanding where you are Spotting change Charting a course Course correction Subject strength Aspirational vs. back-up plan Student segments & objectives “Competitive perimeter” Financial drivers Trends (long term) Shifts (between cycles) Divergence (within cycle) Leading indicators of change Objective vs. mechanics Focus vs. covering the bases Wider stakeholders and community needs Ruthlessness? Plan B Retrenchment Institutional flexibility Success on every measure may not be possible How can the HE sector be future-proofed? 10