More students will stretch unit of resource, some fear

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Cheap seats: teaching funds may have to cover up to 30,000 extra students, with negative repercussions for student experience

Universities may need to cut their spending per student next year because teaching funds will have to cover up to 30,000 extra students, sector figures have warned.

Although cuts to English university funding announced in last month’s grant letter were smaller than expected, there are concerns that those teaching funds still distributed by the Higher Education Funding Council for England will be stretched further than ever.

Tuition fees from the additional 30,000 students, announced by the chancellor in December’s Autumn Statement, will cover most of the costs associated with teaching those entrants, but Hefce also contributes towards the cost of educating students in high-cost subjects and those from poorer backgrounds.

“If 30,000 extra students – some 7 per cent more – call on a Hefce teaching budget in a way broadly similar to last year’s, the unit of resource for each student is likely to be eroded,” said David Maguire, vice-chancellor of the University of Greenwich.

“The headline figure may remain the same, but in practice, there is less money in terms of unit of resource,” said Professor Maguire, who cited student opportunity funding and high-cost subjects as areas of particular pressure.

Inflationary pressures are also diminishing the unit of resource in real terms as institutions cannot raise tuition fees above £9,000 a year, Professor Maguire added. “The headline £9,000 fee has already been eaten away by inflation for two years, so we will have 5 per cent less than two years ago,” he said.

At the same time, said Dame Julia Goodfellow, vice-chancellor of the University of Kent, there was increased spending on students because “the focus on the academic experience…has never been higher”.

“Even recognising the achievement of, and need for, more efficiencies by the sector, this [funding settlement] will put a strain on our expenditure,” she said.

Dame Julia, who chairs Hefce’s Financial Sustainability Strategy Group, added that ministers should begin to consider “a mechanism for increasing the fee cap at least in line with inflation”.

‘Extra will have to be found’

Andy Westwood, chief executive of GuildHE, agreed that the extra 30,000 students would place a strain on limited Hefce resources.

“Although paid for by loans, there will be some students who are on high-cost subjects and from widening participation groups, so additional grants [for them] will have to be found somewhere along the line,” he said.

According to last month’s grant letter, the overall fee income to universities will rise from £5.6 billion in 2013-14 to £7 billion in 2014-15, with Hefce grants lifting the overall income from £10.6 billion to £11.1 billion.

Part of that increase will be the result of the extra 30,000 student places being made available, which would lift undergraduate enrolments at English institutions above this year’s record level of 416,600.

However, with institutions having already expanded student numbers by 7.1 per cent in 2012-13, many may be unable or unwilling to take on more, leaving some places unfilled, warned David Phoenix, vice-chancellor of London South Bank University.

“With an additional 30,000 places, that is an additional 6 per cent [in enrolments],” he said. “If you are also trying to manage student experience, even those who want to expand will worry about ratcheting up student numbers at such a high level.”

At Greenwich, Professor Maguire said that he had no plans to increase enrolments significantly having admitted an extra 800 students compared with 2011-12 while also raising average entry requirements.

“Like other institutions, we are concerned about reputation, and we don’t want to expand much at all,” he said.

The falling number of 18-year-olds in the population and the waning popularity of A levels in favour of BTEC vocational courses might also leave some university places unfilled, experts believe.

“If you look at the number of students getting good A levels at ABB, it is shrinking,” said one vice-chancellor who did not wish to be named and who also predicted that most of the extra student places would be filled by BTEC students.

As a result, there are concerns that the sector’s expansion may lead to students entering the system with fewer Ucas tariff points on average.

The average entry requirements were already lower last year when an extra ,800 students were admitted. According to Ucas’ end of cycle report for 2013, the average A‑level attainment of 18-year-olds accepted into university fell at all types of institutions, while the number of offers of a place being made to students rose significantly.

jack.grove@tsleducation.com