Open University’s numbers dive 28% as pool of part-timers dries up

University faces £17m deficit as enrolments fall while expenditures rise

February 19, 2015

The Open University has lost more than a quarter of its total student numbers over the past five years amid a national collapse in part-time study, leaving the institution wrestling with a £17 million deficit.

The drops in the OU’s recruitment and income, revealed in recently published accounts for 2013-14, came as the institution increased expenditure, notably on FutureLearn, its platform for massive open online courses.

The total number of students at the OU fell from more than 260,000 in 2009-10 to just over 187,000 in 2013-14. In terms of full-time equivalent enrolment, the decline was 10,000 over the five years to about 73,500 last year.

The number of FTE students fell by more than 6,000 in the 12 months to July 2014 alone – a year in which the institution also posted a deficit of £16.9 million, equating to 4.2 per cent of its £404.2 million income.

The figures continue a downward trend for the OU: in 2012-13, the institution returned a surplus of £18.8 million, while in 2011-12 it registered a £37.9 million surplus.

All the OU’s students study part-time, and the institution said that the “most significant driver” of the fall in income was the national reduction in student numbers.

“While it is true that the part-time sector faces a challenging time, our performance remains strong and we continue to perform better than the sector,” an OU spokesman said, adding that 60 per cent of part-time undergraduates taking their first degree in England do so with the OU.

In its 2012-13 annual report, the OU had predicted a “small deficit” for 2013-14. This, the spokesman said, was due to £28 million of additional expenditure on “a number of strategic projects” including FutureLearn, the UK Mooc platform that currently offers free courses from 44 universities and organisations.

The OU has invested £7.3 million in the company over the past two years, the accounts show, while an increase in the number of staff across both the university and FutureLearn as a whole resulted in a £2.8 million rise in personnel costs last year. Offering free courses on the platform is “expected to create interest” in the OU’s “core credit-bearing curriculum”, for which fees are charged.

A source at the university told Times Higher Education that there were questions about why the OU had led on the expensive development of a platform that is also used by 26 other UK universities.

The OU’s spokesman said: “The OU has received thousands of additional enquiries from students who have taken our courses on FutureLearn, with a proportion going on to register for formal qualifications.”

In May, the OU will welcome a new vice-chancellor when the current director of the BBC’s World Service, Peter Horrocks, takes over from former Microsoft executive Martin Bean, who left at the end of last year.

Several sources at the university told THE of concerns that the new vice-chancellor, like Mr Bean, has been recruited from outside the higher education sector.

“Peter brings with him significant experience of managing similarly sized organisations and demonstrates a real understanding of the academic life of the university,” said the OU’s spokesman.

After THE enquired about its finances, the OU circulated a letter to staff stating that although the institution “had planned to return to surplus” in 2014-15, it “will now remain in deficit” to the tune of up to £6 million. A higher-than predicted number of student withdrawals and a failure to hit the February student recruitment target are blamed.

chris.parr@tesglobal.com

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Reader's comments (3)

I think that the Open University's issues are both marketing and strategy related. The market is not shrinking. According to HESA, total postgrad and undergrad part-time enrolment in the UK has been relatively flat since 2012/13. However, OU generally does not open up its degree programs to students outside the EU. Enrolment at OU's principal competitor London International Programs has seen stable enrolment at 54,000 in the most recent year 2013/14. London International Programs enrols a large number of international students from Asia and elsewhere -- so that is OU's marketing problem. It's ignored a large growing market. The other issue is one of strategy. The BBC announced that OU's FutureLearn reached 1m students in February 2015. Setting up FutureLearn was probably the wrong strategy. In the digital age, the largest web-based providers are dominant because information exchange is free and consumers go where there is concentration of both product and service. At 1m students, FutureLearn cannot possibly compete with Coursera which is now approaching 12m students & 1,000 courses. Consider that London International Programs runs its MOOCs on Coursera. Where to from here? Consider revisiting both marketing and strategy.
I decided not to study more with the OU with the tripling of fees a number of years ago. A £500 60 credit course was just manageable on an average salary, but not £1600 - so i can understand how the numbers are down. If you are not doing it for your job and for pleasure it is simply not viable. Shame, as the remit of the OU was access for all. That doesn't really apply anymore as it's just too expensive to learn for pleasure.
I, too, am cutting back on my OU study. I already have a tenured teaching position at University and have truly enjoyed studying subjects outside of my own field but cannot justify the increase resulting from the funding changes. I can't blame the OU but I just can't afford to use them any more. OU on the way out, HE being smashed, HE stagnating because of the fixed 9k and toxic issues surrounding raising it. Horrible times for post-school education.

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