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As competition for students stops trapped universities that are gaining momentum to cut costs, the review warns that “ambitious reforms” of funding and regulations are needed to stem the financial crisis in higher education in the UK.
Sir Nigel Carrington, chair of the Task Force on Change and Efficiency, said that in 2012, the “marketization” of higher education led the institution to “operate as an island” as tuition fees rose to £9,000 in 2012.
Last year, the minister agreed to raise UK domestic tuition fees in line with inflation for three years, with annual payments to £9,535 in 2025-26, likely the parliament exceeding £10,000.
However, Carrington, former vice president of the London University of the Arts, said the funding situation is still “unsustainable” as the real value of fees has fallen by around 40% since 2012.
He added that ensuring the future of the sector requires a “basic rethinking of how higher education works at the national level” and a commitment to “ambitious reform” from universities and policymakers.
A review by the task force, founded by the main lobby group, Universities UK, called for a minister to stabilize the university’s finances, create a “change fund” and remove regulatory barriers to collaboration.
However, the university added that reducing costs by integrating services and procurement should also be considered “urgently” as well.
Long-term funding and relaxing international student enrolment exacerbate the financial crisis in higher education, and universities are taking dramatic cost-cutting measures to avoid a wave of bankruptcy.
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Half of the UK institutions say they have closed the course, but a quarter has created forced redundancy over the past three years.
Carrington said the sector already has “a massive amount” of cuts, and without government support, the UK is at a “real risk of defeating the table in the global league” and warns that it will undermine the quality of its education and research purposes.
In addition to stabilizing sector revenue, Carrington called for a change in “philosophy” from sector regulators “built on the foundational pillars of promotion of competition,” a change in “philosophy” from the offices for students.
The report pointed to examples of collaborations such as the University of London, a coalition of 17 institutions sharing services, and a joint campus run by Falmouth and Exeter University in Cornwall.
Efficiency can also be increased by leveraging sector purchasing power by using “a more strategic and structured approach to purchasing” in areas such as software.
The merger may “may be appropriate in some cases,” but Carrington said they are not “quickly fixes” and are not desirable for most institutions.
Nick Hillman, director of the think tank’s Institute for Higher Education Policy, said he has confirmed that the report emerges from what appears to be “very different” from the current crisis.
“The university knows it needs to balance the fierce competition of the past,” he said, adding that the task force is right to question whether a full merger will bring about effective change.
“The important tests are followed.
Skills Minister Baroneth Jackie Smith said the government has “made a tough decision to put the university in a stiffer, more financial position, but the university must provide opportunities for students and do more to carry out the growth of our economy.”
