By Gordon McKenzie, Chief Executive, Guild HE
Recently the government published 25 guidance documents on the implications of a “no deal” Brexit. Alongside guidance for businesses on trade, tax and product labeling and guidance on workers rights were documents about Horizon 2020 research and innovation funding and Erasmus+: documents aimed directly at universities.
It’s obvious why. The UK is a dominant force in European research, securing €4.6 billion of Horizon 2020 funding to date (14% of the total). And it is a popular destination for students, with 130,000 choosing to study here from elsewhere in the EU.
But as the other “no deal” documents show, UK universities are engaged in many other ways – on medical safety, regulation, and clinical trials, nuclear research and regulation and regional and structural funds.
And even that is far from the whole story. Almost 50,000 EU nationals work in UK universities. The academic workforce is inherently global – no homegrown workforce could ever fulfill the need for specialists in all academic disciplines. Horizon 2020 provides the largest, multi-lateral international collaborative framework for research. Nothing else comes close. It is a ready-made platform for collaborating with key European countries, including six of the UK’s top 10 research partners. This scale of collaboration allows researchers to address “grand challenges” as well as building critical mass to investigate niche areas that the research community in a single country may not possess.
With that level of involvement and integration for universities, Brexit poses similar sorts of problems as extracting an egg from an omelette. So thinking about how universities can thrive after Brexit is important.
But Brexit is just one area of risk and uncertainty facing universities at the moment. One of HEFCE’s very last publications, from March this year, was its annual report on the financial health of the higher education sector. Along with Brexit, the HEFCE report noted the uncertainty caused by the government’s review of post-18 funding, rising costs (including from the USS pensions valuation) and increased global and local competition for students. And all this is in the context of what HEFCE described as “a trend of reducing surpluses and cash levels, and a rise in borrowing. All of which signals a general weakening of financial performance and a trajectory that is not sustainable in the long term.”
Of course not all of these uncertainties and risks will impact on all universities. But several will impact on some. It isn’t hard to imagine the combination of institutional deficit, continuing falls in recruitment, high reliance on teaching funding, high levels of borrowing as a percentage of income, and a relatively high proportion of EU students.
And as HEFCE’s report pointed out there is increasing variation in the financial performance of universities – 24 institutions reported deficits in 2016/17 compared with 11 in 2015/16. Increased competition is producing winners and losers.
How much does this matter? If higher education as a whole is able to thrive do we need to worry too much if individual institutions can’t? The government has said not – some institutions will exit the market and its only interest is in protecting the affected students.
But there are wider government policy reasons why that isn’t a sufficient answer. The cross-government industrial strategy has placed universities fairly central to its ambitions in terms of their contribution to place making, skills and innovation. Universities help businesses to innovate and be more productive. They are often one of the largest employers – especially of highly skilled workers. Universities are an essential part of any solution to reducing economic imbalance: the UK has greater disparities in regional productivity than many other European countries.
And they make a massive contribution to civil society through cultural and sporting activities and through the active citizenship of their students. Losing one of these economic and civic “anchor” institutions from a locality would affect very much more than the university’s students – critically important though they are.
Universities are autonomous institutions. The responsibility for continuing to thrive lies with their leadership teams and governing bodies. But if, in the end, they can’t, government does need to think about those wider risks, about how to take account of that broader set of interests. The Higher Education and Research Act 2017 gave the Office for Students (OfS) and UK Research and Innovation (UKRI) the power to co-operate and share information. Brexit, and the other uncertainties facing universities may well see the combined skills and resources of OfS and UKRI being put to the test.