Hefce unveils 'high-risk' plan

December 7, 2007

Strategy for expansion of 'business-facing' higher education could leave employers and institutions overstretched. Rebecca Attwood reports.

Millions of pounds will be ploughed into a "high-risk" strategy aiming to boost the number of adults with degree-level skills in the workforce.

Board papers released by the Higher Education Funding Council for England reveal the funding body's long-term plans for helping universities "transform workforce development" and to realise Lord Leitch's target of four in ten adults holding a degree-level qualification by 2020.

It came as the Government announced funding of £105 million over three years to allow for a rapid expansion of the number of university places funded jointly by the public purse and employers.

The Department for Innovation, Universities and Skills said the new employer co-funding budget would reach at least £50 million a year by 2010-11. The money will part fund places with an employer "topping up" to the actual cost.

According to Hefce's board papers, ten to 15 institutions will develop "significant" proposals for "substantial business-focused operations", initially, providing about two thirds to three quarters of Hefce's employer co-funded places under its Higher Education - Transforming Workforce Development programme.

The paper warns that "this is a high-risk strategy". Potential risks to universities include fluctuating demand from employers and institutions overstretching themselves, risking financial instability.

It says: "We are trying to do two things at once: build a platform of capacity within higher education to support a potential programme of accelerated growth in employer co-funded provision from 2010-11 onwards at the same time as testing whether a market exists, the nature and scale of the potential demand, and the most effective provider approaches to growing and supplying that market.

"This will involve us in committing significant levels of upfront funding - perhaps of the order of £100-150 million over three years - to projects from which we shall learn, but which may not in all cases deliver the expected outcomes or create the sustainable capacity we are looking for."

However, Hefce argues that the risks will be outweighed by the tangible benefits to universities.

Hugh Tollyfield, special adviser to Hefce on employer engagement, said: "We are not necessarily saying that every one of these projects is going to be a roaring success ... Some may find that the market is small; it is to be hoped that others will find a very substantial one."

Mike Campbell, director of development at the Sector Skills Development Agency, said: "There are risks in every endeavour, but what is the risk of staying in an undergraduate market, given the predicted demographic downturn (in the number of 18-year-olds)? It is a known risk, but a high one."

Speaking at the inaugural Times Higher conference on strategic thought in higher education management last week, Tim Wilson, vice-chancellor of Hertfordshire University, said his institution was "unashamedly" business- facing in its research output and its graduates' employability.

Professor Wilson, who spoke in a session about alternative income streams in higher education, said there was "tremendous potential" locked up in universities and that institutions should capitalise on this.

Bill Rammell, the Minister for Higher Education, has said that every higher education institution should be considering how it can respond to the skills agenda in ways that match its mission.

Speaking before the Innovation, Universities and Skills select committee last week, he said he did not want a distinction to be drawn between "research-intensive" and "business-facing" universities.

"I know there are a number of universities who are doing tremendously good work engaging with businesses on higher-level skills who are attempting to promote themselves with the business-facing label, and that's fine, but ... I want all universities to be business-facing," he said.

This week also saw the first "skills summit" where vice-chancellors and Sector Skills Councils - representing employers' skills needs - met to discuss future ways of working together on the Government's skills agenda.



- The budget for higher education places co-funded by employers will be £15 million in 2008-09, rising to £40 million in 2009-10 and at least £50 million in 2010-11

- The Department for Innovation, Universities and Skills says this will allow for at least 5,000 additional student places in 2008-09, 10,000 in 2009-10 and 20,000 in 2010-11. It will also be spent on infrastructure

- Because 70 per cent of the 2020 workforce has already left school, the Government says universities will need to develop new ways of teaching the workforce, including in the workplace and online, tailored to company needs.

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