Trial by fire will prove our mettle, insist v-cs

Some 60 per cent of heads of UK universities believe their institutions will emerge "bigger and stronger" in the wake of the coalition's reforms to higher education, while a significant number want to minimise reliance on the state, a survey of vice-chancellors has found.

PA Consulting Group's survey found fewer vice-chancellors forecasting failures, bankruptcies and mergers compared with respondents to last year's survey.

There are signs of a willingness to break away from state regulation, with the heads of two institutions saying they were "actively considering" opting out of funding council supervision and 33 per cent looking to "minimise" dependence on government.

However, the responses - from 65 of the 165 heads of institutions contacted - suggested that there is still a short tail of "distinctly nervous institutions" worried about adapting to the new funding world. Two survey respondents said they feared that their own universities could be casualties of the shake-up.

The results indicate that universities are positioning themselves to compete in the world of higher tuition fees and reduced direct funding, with 40 per cent saying external market focus and brand was their institution's top "strategic priority".

There is also evidence of increasing stratification of the sector, with 80 per cent foreseeing the emergence of a "super league" of strong institutions.

The survey asked vice-chancellors to nominate an institution they most admired for its leadership and innovation in response to changes. The University of Warwick received the most nominations (11), followed by the universities of Exeter (9), Nottingham (8) and Loughborough (7) and University College London (6).

"Across the responses, it was apparent that the majority of universities believe they are well placed to face the challenges ahead, having invested over a number of years in cost reduction, staff and systems changes and new business development," the report says.

Paul Woodgates, a higher education expert at PA Consulting Group and co-author of the report, said there appeared to be a clear distinction between universities with strong leadership who had taken action early and those with a bunker mentality.

He added that although there are many vice-chancellors who disliked the ideology behind the government's reforms, some had been quite effective at putting that aside and focusing on finding a way out of the crisis.

Meanwhile, only a minority (30 per cent) believed the introduction of the new higher fees regime would lead to a significant drop in demand for places overall - with more forecasting "big swings" between modes, subjects, institutions and perhaps regions.

Mike Boxall, also a higher education expert at PA and the report's co-author, said the group that are nervous about the future "feel they are locked into a portfolio of courses and areas that are under challenge".

simon.baker@tsleducation.com