Cuts in England - The first round

So now we know, higher education will not be immune from cuts in public spending, not that anyone really thought it would be. But I imagine lots of people were keeping their fingers firmly crossed until they heard the Queen's Speech earlier today, hoping the universities would be lucky, at least for now. A few months ago, the previous government had announced that for 2010-2011 it would make available through HEFCE sufficient funding to support an additional 20,000 student places in England. The Queen's Speech indicated that there would now be just 10,000 extra places, the other 10,000 being cancelled.

This is not a massive cut, but some universities might already have taken on some extra staff in anticipation of the additional students they envisaged admitting, and they will now experience some financial strain as a result. Other institutions, already under financial pressure, will have been looking to these extra students to ease their problems a little. And of course more potential students will be disappointed when they find there are no places available to them later this year. Thus even this quite small funding cut will leave a trail of financially stressed institutions in its wake, plus unhappy would-be students. And this is only the first round of what is likely to be a succession of cuts over the coming years, as the country strives to restore its public finances to something like balance.

On the face of it, therefore, the outlook for higher education is quite bleak, and not only in England but also in the rest of the UK. However, I am an optimist by nature, and I think that endless worrying about where the next cuts might fall in the coming years is a sure recipe for depression, low morale, and general gloom across higher education. Instead, it seems far better to accept the unpleasant reality of cuts as quickly as we can, and start looking forward constructively to the sort of higher education system that will be able to flourish in the new conditions. Such a system, I would expect, will have a lot in common with where we are today, so the tendency to panic and engage in apocalyptic fantasies is hardly justified. So how might our HE system change - both in England and in the UK as a whole? Here are few initial thoughts, all needing lots of elaboration (but not today):

(a) The system might be somewhat smaller, conceivably 5-10% smaller in terms of student numbers by 2015 or so. Watch out for mergers, possibly even the occasional closure of a university.

(b) The system could adapt to the financial pressure by teaching more and more students 'on the cheap', but I doubt (and hope) that this would prove self defeating and politically unacceptable. In a world of fees, universities cannot ignore student views about the quality of their experience, and nor should they. But delivering a high quality of teaching is not cheap.

(c) Personally, I think that universities have probably reached a point where they are rather over managed, even excessively micro managed, and I'm convinced that modest savings are achievable in that area without detriment to students. Some other costs might be cut back, but I suspect not easily or by much.

(d) Hence the best way forward must be to seek new forms of additional revenue. This could come through non-EU students (paying high fees), through research and contracts, through other commercial activity, and through fees paid by UK students - preferably not up front, and ideally paid for through an income-contingent graduate contribution (extending the present English system). Another source of funding, not much used in the UK except by a handful of leading institutions, is private donations - we really need to create a culture more akin to that in the US where it is more usual for alumni and private businesses to make donations and offer sponsorship to universities.

How we manage all this, especially (d), is not yet very clear to me. But I'm sure when we survey the higher education landscape in five to ten years' time, we shall find that the most flourishing institutions will be those that have treated the cuts that are just beginning as an opportunity for change and innovation, and even growth, rather than as an excuse for endless griping at the government. Of course the environment is going to be difficult, but let's take it as a challenge, not as a threat!