Financial stresses in higher education: what role can advancement play in supporting universities?
Background and Context
According to the Office for Students, 40% of English universities are running unsustainable deficits. This is a challenge that is not limited to England, as the teaching unit of resource for home students has been eroded by inflation across the UK nations, and simultaneously the numbers of international students coming to the UK has fallen back.
These are unchartered waters, as no British public university has yet had to close, despite the growing concern over the past few years. It is not known what would happen if any major institutions did collapse. An insolvency regime is still to be developed by the Department for Education in England, and even in the other nations it is not clear what would happen if such an eventuality were to occur. We know that the UK government is looking at how it may have to intervene in England to mitigate the financial stress on universities. There is no doubt that, even if institutional insolvency can be avoided, the financial stresses on the sector are likely to continue. This would have a real impact on students, staff and the wider economy, where universities are often a major employer.
All of which made the session I attended on the ‘Financial failure in higher education: what could happen if a university became insolvent?’ very timely. Hosted by The Policy Institute, Kings College London and PwC, it was a thought provoking and enlightening session on one of the key issues facing the higher education sector at the moment - the real and present risk of continuing financial stress in UK Higher Education.
It's clear that there is:
· Real risk of insolvency in the sector in the case of a small number of important HEIs
· Little political/legal clarity re what the process would look like
· A lack of formal protection for students
· A need for urgent planning to protect students and staff
· A need to prevent institutions from entering circumstances where financial stress leads to a more serious financial situation.
“This is where government initiatives and agendas are going to crunch into each other.” Professor Sir Steve West, Vice-Chancellor, President and CEO of UWE Bristol
So, what next?
There was consensus that the Office for Students is not currently set up to deal with the challenges ahead; lacking the resources and capacity to engage with universities in a way that will provide support to the institutions and protect students and staff. Even in Scotland (Scottish Funding Council), Wales (Medr) and Northern Ireland (the HE division of the Northern Ireland Executive) there isn’t a clear roadmap from funders and regulators.
Looking to the future, speakers discussed the need for interventionist approaches, including the potential for a higher education commissioner and special legislation around higher education administration to provide genuine protection for students and lenders.
Overall, the workshop emphasized the critical need for proactive measures to address the financial challenges facing the higher education sector.
Where does advancement fit in this?
Given my background, I couldn’t help but ask myself where does advancement fit in supporting the institutions we work in and with?
Clearly, advancement cannot by itself act as a counter to the most severe financial problems in a university. But ensuring that advancement is a critical imperative and embedded in university strategies, not always the case, could prevent financial stresses from worsening, and support institutions as they try to adjust to the difficult financial climate.
Given the challenging times, greater integration and efficiency is needed to ensure resources and knowledge are pooled and used efficiently. Some of the priorities within the university advancement remit that help generate income and promote institutional reputation include:
Demonstrating the value of universities
There is work to be done in mobilising key stakeholders around the value of universities to the economy, local communities and broader society. Despite the former government and many media outlets’ claims to the contrary, the economic impact of universities on regional growth is clearly evidenced. We also know that university researchers have been leading actors in 40% of the top inventions since the 1950s, that University-based scientists contribute 80% - 90% of the scientific discoveries published every year, and that, according to the latest Higher Education Statistics Agency (HESA) data, over 554 million people engaged in free events and interacted with content produced by their local university in the last year alone. As many local authorities have faced funding pressures, Universities have moved into the civic space to support their local communities. This outreach activity is often undertaken by advancement professionals in the sector.
International Student Recruitment
We have absolute certainty on the benefit that international students bring to the economy (£41.9 billion generated in 2021/2022) and to the institution that host them. This is not to mention the cultural and social benefits to the country and to our universities. There is, in fact, recent evidence published by the Higher Education Policy Institute, Universities UK International, and Kaplan International Pathways, in partnership with London Economics on the benefit and costs of international higher education students to the UK economy.
According to Universities UK, institutions are making changes to strengthen their international recruitment practices to ensure they keep pace with the ever-changing global market and subsequent applicant behaviours and trends. Following the general election, the Secretary of State for Education has re-asserted the UK’s commitment to the graduate route visa, and set a positive tone in favour of international recruitment to UK universities. This allows advancement professionals to support UK Universities in rebuilding their competitive position in international student markets.
Ensuring a Strong and Consistent Brand
We know that a strong brand can help institutions attract talented students and staff, enhance the institutional reputation, and foster stakeholder engagement. It is how universities set themselves apart and convey their ‘what’, ‘why’, and ‘how.’ The ability to differentiate from other institutions is more important than ever in this competitive and crowded marketplace. Again, this is essential for student recruitment.
Diversification of Income and Leveraging Existing Partnerships
Universities will need to continue to think creatively about how they can diversify income and philanthropy’s role should not be underestimated. Whilst purely philanthropic income represents a small proportion of overall university income, it causes ripples of positive impact across the university. From funding life changing research, providing access for students, who given their personal circumstances would otherwise not be able to afford a university education, promoting the reputation of the university globally through scholarships attracting brilliant students from around the world, philanthropy’s impact is far reaching within an institution. Indeed, it will be key for organisations to leverage existing partnerships and maximise engagement with key stakeholders across the university.
Similarly, the role of alumni and the impact they can have, as the biggest group of external stakeholders in the university, should not be understated. This work does not happen in a vacuum.
Cairney & Company and our team of experienced advancement leaders work with universities across the world to help them through our integrated approach to advancement. To read about some of the work we do, visit our website or reach out to us via email to see how we can help you.
You can watch the full recorded workshop here: https://youtu.be/Ckee--kRlvQ
A blog by Cairney & Company Senior Consultant, Annarosa Muscatelli.