7 key challenges for UK higher education

Operating in a global market

At some £3 billion in 2012‑13, income generated from tuition fees for international students is a significant contributor to the sector’s top line.

Organisations should identify how best to incorporate a global outlook into their current strategies in a way which both stretches and enriches their domestic approach and enhances their brand.

There is no one‑size‑fits‑all approach when it comes to competing globally.

It is for individual institutions to assess how best to approach the increasingly international context that the sector finds itself operating in.

Rising student expectations

Increasing the tuition fee cap has led to a focus on the student and their expectations in a way not seen in UK higher education before. Students are now paying more for their studies and expect a more lucrative return on investment, whether in academic quality, employability or the facilities offered to them.

University strategies must become more flexible in order to best attract students in a highly competitive market, assessing their position and mapping the customer segments most important to them.

Institutions will need to take difficult decisions on how to target those markets and have processes in place to best optimise those routes, as well as ensure they have the expertise and innovation required while working to overcome embedded cultural conservatism.

Increasing costs and shifting funding

With rising student expectations and intense competition as students take on a larger financial burden for their studies, institutions need to invest in infrastructure, teaching and career support to attract students. Staff, teaching and learning costs are increasing rapidly.

The sector has responded well to this challenge since 2011, Deloitte says. HEIs have worked to cut costs; savings are twice the level they were in 2008, and though there is more to do, actual efficiencies have exceeded targets since 2007.

Without further transformation there is a significant financial risk for institutions as levels of expenditure start to outstrip growth in income.

The sector must build on its success and transform further in order to fully offset the risk of financial failure.

Each institution has its own mix of subjects, its own cost structure, and each will need to reshape its operating model in order to best direct spending, attract revenue, and reduce costs, the report says.

A demand and need for new technologies

The advent of new technologies has provided the sector with new opportunities to recast their back and front office functions, says Deloitte. The response since 2011 has been positive, with digital spending rising in recent years and continuing to rise.

Universities’ back offices require attention. There is still a reluctance to utilise technology in integrating and improving administration and student support. Such areas continue to rely on multiple IT platforms for different services.

With rising student expectations and demands, integrated and streamlined IT systems can ensure a smoother, more cost‑efficient administrative process.

Linking estates, strategy and the student

The sector must continue to ensure that their space and their strategy is aligned, particularly as student demand points to dramatically different estate requirements as compared to even the recent past.

Changing ways of learning mean different demands are being made of space.

For example, there has been a shift from large lecture theatres built for one‑way learning to more collaborative workspaces. The same can be said of library spaces, with a move towards shared areas fit for group work over independent workstations.

These changes have driven significant investment in new premises so that institutions reflect student demands.

Attracting and retaining the best talent

Universities must work to align recruitment with their corporate strategy and priorities, the report advises. They should not be reluctant to hire people from the corporate world for their management functions, and should work to align incentives while being sensitive to the impact this may have on a university’s culture. Recruitment strategy must reflect the particular context that

Making research sustainable

Funding for research has become more difficult to access since 2011. Availability has moved away from block grants, and is now spread more thinly, and open to intense competition.

As university income streams shift away from government, universities should look to earn income from outside of simple one‑way government funding, working with new partners and organisations to diversify the money they use to underpin research

Recommendations are taken from Deloitte’s Making the Grade 2015:The key issues facing the UK higher education sector in 2015 and beyond.

jack.grove@tesglobal.com