Nick Hillman, Director, HEPI

Responding to the new report by London Economics @LSEnews and @UCU about the impact of the Covid-19 pandemic on university finances

It is great to see UCU and London Economics collaborating on such a detailed and important piece of work, which is based in part on some pre-crisis work undertaken for HEPI and Kaplan.

I welcome the focus on the next financial year [2020/21], which is when the real pain will hit higher education, as well as the focus on what the crisis means for staff in higher education institutions and for the different regions of the UK.

But the research needs to be part of the debate; it must not be regarded as the final word.

We are in a very uncertain place right now. No one can accurately and securely predict what will happen with the progress of Covid-19; nor can we know for certain its full impact on educational institutions.

There are grounds for querying some of the assumptions underlying the research. For example, the report assumes higher education will be considerably less attractive in 2020/21. Many dire predictions have been made on this already and no one seriously believes international student numbers will hold up. But, in a deep recession, some people may actually opt to stay in formal education. In short, the current crisis may nudge people who leave school (or graduate) while undecided about their next move to stay in education. In an economic crisis, deferring entry to the labour market makes more sense than opting for less education.

So I wouldn’t currently bet my house on the report’s conclusion idea that there will be 111,000 fewer first-year home students, a drop of 16%, in the next academic year. Such forecasts seem to be based on the sort of polling evidence on future behaviour that wrongly predicted big falls in full-time study in England when fees increased to £9,000, and they are not guaranteed to happen.

Moreover, the fine details that make up the headline totals matter a huge amount in research like this. This report assumes every single university will lose large numbers of students. So, for instance, it predicts 2,700 fewer first-year enrolments at each of Oxford and Cambridge – including around 900 fewer new home students at each place.

That seems odd when there is usually huge surplus demand to attend our oldest universities. Moreover, many people are so scared of other prestigious universities sucking up a greater market share of home / EU students in the crisis that they have been demanding restrictions on student recruitment – and it is widely believed Ministers are sympathetic to this idea.

No one should underestimate the severe impact of Covid-19 on higher education. But, given the diversity of our higher education sector, it is right to question how likely there is to be a severe recruitment crisis among all major student groups at every single institution.

Universities need government support and the new report is a welcome addition to the evidence base explaining why this is so, but I still question the idea that it is based on ‘relatively optimistic outcomes for higher education providers’.

Above all, we must be careful we do not foster the very conditions we want to avoid by letting pessimism take over. We must not only imply to our fellow citizens or to the rest of the world that UK universities are halfway to hell in a handcart when, in reality, every single conceivable model of a successful post-Covid and post-Brexit UK economy has our outward-facing universities at its heart.

And that, of course, is why – despite our differences on the best ways to model the effect of the current crisis on the higher education sector – I agree with London Economics and the UCU that our universities need proper support in the months ahead.

Nick Hillman, Director, HEPI

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