Some universities ‘face losing quarter of students’ in next decade

Non-elite UK universities face losing a quarter of their undergraduate student income in the next 10 years owing to population declines and “predatory” recruitment practices, according to a new report, which warns that good institutions may fail through no fault of their own.

Many universities are not taking current threats seriously enough, the Higher Education Policy Institute (Hepi) paper argues, with strategic planning still assuming student numbers will grow.

Author Bahram Bekhradnia, who founded the thinktank and now serves as its president, highlights how high-tariff institutions have seen their proportion of students balloon in recent years after they grew their domestic student intake to compensate for declining overseas admissions.

This has increasingly squeezed middle-tariff providers who have in turn adjusted their own recruitment to leave the lower-tariff providers the worst off. These universities have lost between 50,000 to 75,000 students who might otherwise have attended their institutions as a result, the report says. 

They have been able to compensate for this in recent years due to expanding student numbers overall but the number of young people in the UK is expected to decline rapidly after 2030.

Bekhradnia presents three scenarios for what might happen to recruitment during this period; all university types are hit equally by the declines; higher tariff universities recruit more or maintain their numbers while others drop; and higher tariffs continue to grow, leading to steeper declines in the rest of the sector. 

The second and third trends are seen as the most likely and would result in non-high-tariff institutions losing 25 or 29 per cent of their home undergraduate students respectively by the middle of the next decade, Bekhradnia estimates. 

It says “this reality is not widely recognised”, and “strategic planning in many institutions continues to assume maintenance or even growth in student numbers, with limited consideration of the implications of demographic decline”. 

It warns that “perfectly good universities – institutions that are doing an excellent job and adding real value for the students they recruit and the regions they serve – may fail, and a critical part of the national infrastructure will be damaged”.

Bekhradnia said the report shows a “very serious story which needs to be taken seriously” by policymakers and university leaders. 

“The numbers are not negotiable. The forthcoming decline in the young population will almost certainly mean a decline in student numbers and therefore in income, and on certain scenarios the decline in income of the non-high-tariff universities could be in the order of 29 per cent. That is not sustainable and would lead to the failure of multiple universities.

“The higher-tariff universities cannot be blamed for seeking to protect their income, and policymakers will need to decide whether the consequences described in this report will be acceptable. The alternative is some form of student number controls imposed on individual institutions.”

The paper says that the only way to curb the “predatory activity” of high-tariff institutions was through the reintroduction of some form of recruitment cap, as “if higher-tariff institutions are able to increase numbers, notwithstanding the sharp demographic decline, there will be every incentive for them to do so”.

But Libby Hackett, chief executive of the Russell Group, argued that an increase in places available at its universities was “good news for student aspiration, opportunity and for employers as we grow the UK’s highly-skilled workforce”. 

She added it was “vital to preserve student choice and access to high-quality courses”. 

“The new report from Hepi underlines the deep-rooted financial pressures facing the sector. The long-term solution, however, is not to introduce draconian measures and central planning, but rather to focus public funding on supporting high-quality, high-value provision across the sector wherever it exists. 

“This will support better graduate outcomes and enable universities to continue contributing to the UK’s workforce, growth and global reputation,” Hackett said.

juliette.rowsell@timeshighereducation.com