UK ‘will get university sector it can fund’, UEA v-c warns

Current business model not sustainable for more than two to three years, according to David Maguire

December 7, 2023
A university college student, on a slack rope balancing to illustrate Business model will ‘soon fail’
Source: Alamy

Many UK universities have only another two to three years until their business models become unsustainable, and the sector should not bank on a change in government radically reforming the English fee regime, a leading vice-chancellor has warned.

“Ultimately, we will get what we are able to fund. Government, employers and students will get the quality they are prepared to pay for,” was the stark message David Maguire, the troubleshooter vice-chancellor tasked with turning around the fortunes of the under-pressure University of East Anglia, delivered to Times Higher Education’s THE Campus Live event in Liverpool.

“I do not think the current business model is sustainable in this country beyond two or three years,” he said.

“By that, I mean continuing to perpetuate in-person teaching using a boarding school model with very high staff-student ratios.

“Unless something radical changes in the economics of tuition fee income, salaries and other things, I do not think that is sustainable. What we need to do is do something different. We have got to introduce alternative business models to make universities work.”

Professor Maguire said universities that evolve quickly will survive but those that do not “will find it increasingly difficult”.

“There will be some, of course, that are so well found that they can withstand this for quite some time, but there are many others that can’t,” he said.

Professor Maguire said he was “not holding out” for a change in government in the hope that it would radically reform the funding situation for universities because there did not appear to be much difference between the approaches of the major parties in the short to medium term.

Therefore, the former University of Greenwich vice-chancellor said, institutions will need to “work it out for ourselves”, potentially involving moves away from the “current model of master-apprentice in highly intensive in-person classes”.

He said hopes that spin-off companies would generate more income were “misguided” unless “you hit the jackpot” and, although digital automation of expensive services such as student support might present some opportunities, it was “not the great solution” many have predicted.

Other options facing universities were to do less research, extend transnational education initiatives, open branch campuses, move into online education and merge or share facilities with neighbouring institutions, Professor Maguire said.

Given that staff costs account for 50 per cent or 60 per cent of a university’s expenditure, increasing staff productivity could have a “massive impact on the bottom line of an organisation”, he said, but this was “controversial territory” and “some will fight very hard to maintain what is actually a pretty good deal”.

Professor Maguire said changes to staffing could include some automation but also initiatives such as team teaching approaches and blended learning in which parts of courses are delivered by a range of staff members or online.

The changes that are going to be needed in the sector might require senior leadership teams with different skill sets, Professor Maguire predicted.

“I don’t think we are as well developed as some other sectors in terms of business transformation, automation, use of digital technologies,” he said.

“Perhaps – at the risk of using the wrong phrasing – we need to grow up a little bit as a sector to develop those skills, and to grow out a little bit our experience as there will be more of this to come down the line.”

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Reader's comments (3)

Given that staff costs account for 50 per cent or 60 per cent of a university’s expenditure, increasing staff productivity could have a “massive impact on the bottom line of an organisation”, he said, but this was “controversial territory” and “some will fight very hard to maintain what is actually a pretty good deal”. Oh dear. I read this after reading Pretty good deal eh?
Sustainable appears to mean we'll work you harder and pay you less.
"pretty good deal".... Only if you find include market value outside unis. Academia used to attract the best and brightest. The deal was you have a livable salary and freedom to pursue intellectual pursuits. If you take away either of those, is no longer attractive. Maybe mid career academics won't leave, but this week staff the next generation of phds and academics.