Share the dream and state the case

In the context of the speech delivered yesterday by David Willetts, the minister for universities and science, it is an understatement to say that universities live in interesting times. The cuts to be announced in the Comprehensive Spending Review later this month will bring about a fundamental shift in the balance of government investment in the public sector on a scale not seen since the end of the Second World War.

What does this mean for higher education? With both Conservative and Liberal Democrat ministers starting to show their hand and with Lord Browne of Madingley’s review of university fees and funding reaching final proofing, the mist in my crystal ball is starting to clear and allowing me a glimpse of the future of higher education.

In short, I foresee that 20 October 2010, when the CSR is announced, will mark the beginning of five of the most exciting, dramatic and completely terrifying years that the sector has known for at least three decades.

For higher education, the overriding theme will be providing “value for money”.

In teaching, to meet ever-increasing expectations, we will see a new dawn in transparency and quality that recognises the primacy of the student experience. Students will be provided with clear and accessible information to enable them to understand the choices available, and the effect will be to blast apart the notion that the sector is one amorphous mass. The diversity and differentiation of task and mission that underpins the excellence of higher education in the UK will be recognised and celebrated. Prospective students deserve more than glossy advertising prospectuses to inform crucial decisions about which university to attend and which course to study.

To ensure research excellence, scarce resources will be carefully allocated to deliver maximum impact. The new system of assessment and funding will build on acknowledged excellence to usher in an era where recognition that government investment demands impact will play a central role in determining reward (alongside and tied together with that excellence). Co-creation of knowledge with businesses and charities, rather than an ivory-tower mentality, will become the norm.

Alongside these key changes, we will see the shape of the sector shift. The coalition government will push forward with a system of credit accumulation and transfer, and break down barriers between full-time and part-time study; raise the status of further education; encourage private providers to enter the market; and provide access to a form of higher education for all, literally at the end of every street.

This will challenge the sector to respond, particularly as teaching resources increasingly will be redirected towards science, technology, engineering and mathematics subjects, areas that the government believes will provide the greatest returns for UK plc. The funding for training of postgraduate research students will be restricted on the basis of institutional ability to deliver a sustainable support and training environment.

Finally, the government will question whether its investment in teaching and research delivers a system that satisfies taxpayers, students and businesses.

This will require tough choices to be made about the use of every income stream, particularly graduate contributions and the focus of research funding.

More will be delivered to students.

Researchers will contribute more.

The sector will be opened up to more competition and will expand in many novel ways.

Yet – and this is the economic reality – all these improvements and radical redesigns will be undertaken not with a rise in funding but rather with significant reductions over the spending review period.

The Higher Education Funding Council for England’s Financial Sustainability Strategy Group, which reported in early 2009, concluded that the sector was already papering over the cracks in the delivery of the student experience. Its conclusion was that a 20 per cent increase in funding would be needed to reverse the decline of provision.

Instead of that 20 per cent rise, we have experienced cuts, and there are more to come, which will fundamentally shift the relationship between the university system and its major funder.

Now, institutions will not accept these cuts lightly, and a lot of work is being done to challenge them, but we must be realistic.

Restrictions in income now may be mitigated by an increase in graduate contributions, but any additional income will not flow until the last years of the government. Only at that stage would higher education funding start to crawl its way back towards current levels. The gap between the cuts and any future income is the now well-known “Valley of Death”. Minimising the depth and width of the valley must be our central priority. And in this, the sector faces its greatest challenge.

Before the election, Willetts warned the sector that it had been poor at making its case for investment and that it was possible, indeed likely, that it would suffer as a consequence. This warning quickly became a reality. The gap between the sector and the ministerial team was illustrated starkly by comments Willetts made in his speech yesterday: “We cannot expect people to pay more after they graduate if they have not been properly taught,” he said. “I want to be able to look students in the eye and say they are getting a better education in return for the higher contribution they will make.”

Yet we must all recognise that the financial scenario I have painted does not deliver a sustainable future for higher education.

It is right, then, at this most difficult of economic times that questions regarding, for example, the appropriate level of individual graduate contributions and the focus of research funding be confronted, debated and answered. In so doing, we must learn to speak a language understood not only by ourselves but one shared on the doorstep of every household. We need to do more than simply resolve our immediate crisis; we must set out a genuine vision that can be shared by institutions, students, taxpayers and the government – not for the next five years but for the foreseeable future.

I believe that the case for investment is compelling. We must be able to look anyone in the eye and defend the success and value of the UK higher education system. As members of the higher education sector, we have a responsibility to make our case – loud and clear and now.