As the dust settles on the plethora of announcements and ideas in the Post-16 Education and Skills white paper, it’s time for university Audit and Risk Committees to start reflecting on the opportunities, challenges, and risks that the white paper signals.
Broadly, the higher educator sector’s response to the white paper has been positive. This reflects the government’s restatement of the value of higher education to the UK economy and commitments to boosting its international standing. The headline news on annual inflationary increases to tuition fees will help to alleviate some immediate institutional financial challenges, while ambitions to boost research cost recovery and look at the cost of the Teachers' Pension Scheme could realise financial gains in the longer term.
While the persistent calls from the HE sector to reinstate maintenance grants for the poorest students are finally being addressed, limiting financial support to subjects aligned with the Government’s missions and industrial strategy risks constraining student choice. This also risks disproportionately impacting recruitment at some smaller and specialist institutions. It’s likely that financial benefits from increased tuition fees will be tempered by the new levy on international students, which may also act to suppress student demand in the face of strong international competition and wider changes to the UK visa regime.
Universities UK’s 2024 blueprint for change1 called on the Government to facilitate the creation of an effective and efficient tertiary skills system, increasing the flexibility of the Lifelong Learning Entitlement scheme and incentivising further collaboration and connectedness between education providers, employers and regulators. These are central themes in the white paper which offer universities new opportunities to support people through high quality, flexible and modular learning and upskilling. This is a welcome move, alongside commitments to support universities in driving greater economic growth locally and nationally. However, these commitments also indicate a more directive approach to where and how public funding for teaching, research and innovation may be deployed in future, with preferential investment in strategically important subjects, and ultimately a greater degree of concentration of research funding.
To enable future success, the white paper also highlights a need for stronger HE governance, which will see a toughening of the relevant Office for Students (OfS) conditions of registration. While there are familiar messages for governing bodies to ensure that institutions have sustainable business models and operate effectively and efficiently in the public interest, the white paper outlines new expectations too. That governing bodies should challenge how institutional strategies align with government priorities and how institutions might “specialise in areas of strength and collaborate with others.” This broad call for institutions to focus on what they’re good at and to leverage new opportunities for efficiency through collaboration, is one of the core themes running through the white paper. While this approach respects universities’ autonomy and provides institutions with the freedom to respond in the context of their own missions, ambitions and locations, it’s coupled with an intention to give the OfS additional powers, including the ability impose limits on student recruitment, “where growth risks poor quality.”
It is therefore important that Audit and Risk Committees understand not just the specific changes announced but also have an opportunity to reflect on these underlying policy themes. While there are many unknowns at this time, the direction of travel set out by the Government will influence strategic choices and should inform debate about risk appetite and the nature and management of strategic risks.
We’re suggesting five practical things that universities can do now to support their Audit and Risk Committees. If you’d like to know more please contact us at: enquiries@uniac.co.uk
