Turn ‘restructuring regime’ into ‘transformation’ fund, v-cs urge

Universities have urged the Westminster government to use a scheme set up to bail out institutions in financial crisis as a targeted “transformation” fund that can support higher education in meeting government policies on lifelong learning and other areas.

In its evidence submission for the crucial government spending review due next month, Universities UK calls on ministers to “develop the higher education restructuring regime in England so that it can support transformation and catalyse sector-led change”.

The restructuring regime (HERR) was set up last year to offer emergency loans to universities at risk of financial collapse due to the pandemic on condition that any such institution followed recommendations by an advisory board on a new strategy.

Giving more details on its proposal, UUK says “regulatory interventions or other restrictions will not be sufficient to drive the level of transformation required within higher education institutions to achieve many of the goals set out in this submission and by government.

“Targeted funding would catalyse the most wide-ranging and high impact changes needed to drive economic recovery, enhance local and regional growth and improve the student experience.”

It goes on to suggest that “the most innovative and impactful plans for change by higher education institutions are supported by the government”.

“Funding would be allocated based on the level of ambition, magnitude of anticipated benefits, and expected impact funding would have on accelerating the speed of change.”

Areas that UUK says could be worthy of targeted support include universities that want to reshape their courses to make use of the government’s lifelong loan entitlement, those that want to work with further education colleges to deliver sub-degree provision and institutions seeking to help meet local skills shortages.

Elsewhere in its submission, UUK calls on the government to “maintain the unit of resource per student to make sure the quality of higher education is not compromised”.

It says the current undergraduate fee cap of £9,250 “is equivalent to about £7,500 in 2012-13 terms (when the fee cap was increased to £9,000). This is a decrease of about 17 per cent in value.

“A cut or further erosion of this would negatively impact teaching quality and student experience, as well as the ability of universities to invest, develop new forms of provision, and deepen their regional impact.”

Speculation has been mounting over recent months that higher education will be targeted for Treasury savings in the spending review, with options including limiting access to loans, changing graduate loan repayment terms or even cuts to the fee cap said to be on the table.

As well as its reference to the fee cap, the document asks ministers to maintain their commitment to boost research funding to 2.4 per cent of gross domestic product. In particular, it urges the government to “make sure funders can significantly increase flexible, excellence-driven and low-bureaucracy research funding for universities (known as quality-related research funding)”.

There are also calls for increases to the Higher Education Innovation Fund in England, as well as “similar funding streams in the devolved administrations” and a “stable, multi-year settlement” for the Turing Scheme, the government’s replacement for the European Union Erasmus+ scheme.

The submission is also accompanied by a document that updates figures on the economic impact of UK universities, which says that the sector had grown by around a quarter over five years to be worth more than £50 billion in GDP. 

According to the impact assessment, by Frontier Economics, UK universities support more than 450,000 jobs across the economy in addition to the 360,000 people employed directly.

Steve West, UUK president and vice-chancellor of the University of the West of England, said: “The economic and cultural contribution of our universities is vast and benefits communities across all parts of the UK. Universities can be central to speeding up the UK’s recovery from the pandemic. 

“Now is the time for government to capitalise on the strength of our world-class universities, working with us to ensure universities have the right funding environment to drive economic growth, create new jobs and improve opportunities for people of all ages and backgrounds.” 

simon.baker@timeshighereducation.com