University leaders fear demand drop

StudentsUp to 30 institutions could fail in the next few years amid a drop in student demand, university leaders fear.

A new survey reveals concerns about changes to higher education, with more than half of the senior staff questioned saying it is likely that a number of universities will fail or go bankrupt.
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More than three quarters (77%) of university leaders said they expect to see mergers and takeovers, found PA Consulting Group's fifth annual higher education survey. Increased competition among universities for students, at a time of falling demand, is the "major force" for the changes, it claimed.

The survey says that several of the university leaders questioned predicted that "as many as 20 to 30 current higher education institutions could become unviable if student demand continues to fall". Universities that rely on overseas students who require visas will be particularly vulnerable, it claims.
The survey also found that more than nine in 10 of the 60 university leaders surveyed rank improving the student experience as one of their top three priorities. More than nine in 10 said they were concerned about falling numbers of UK and EU postgraduate students, with over 80% worried about falling numbers of students from outside the EU.

Just over half said they were concerned about the prospect of a drop in demand from UK and EU undergraduates, while 42% said that this area of student demand is still "highly or moderately promising."

Mike Boxall, higher education expert at PA Consulting Group, said: "It is clear that we are witnessing a sea-change in the dynamics of higher education. Leaders no longer expect funding or innovative thinking from official sources and Government funding is no longer part of providers' survival plans. After years of rhetoric, students and the experiences offered to them are finally driving changes at the heart of the higher education system."

Under major Government reforms to higher education, fees have tripled, with universities now allowed to charge up to £9,000 a year. There have also been changes to admissions, which last autumn allowed institutions to admit as many students with at least two A grades and a B at A-level as they liked. This autumn that will be lowered to students with ABB.

Nicola Dandridge, chief executive of vice-chancellors' group Universities UK, said: "There will clearly be significant challenges ahead for higher education in the coming years, but universities have shown readiness to embrace change and have become adept at responding in uncertain political and financial times.

"The UK university system is world class. One of its great strengths is its diversity, with universities covering a broad range of courses and disciplines and with different universities focusing on different strengths. Some may fare differently to others in the new fees regime, but overall universities will continue to respond to the changing demands of students. They are currently in a strong position to respond to future challenges."
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