University challenge: the potentially perilous future of London's higher education


Early reports from UCAS signal a drop in university applications. Jonathan Ruddle, senior engagement manager at Maxxim Consulting, discusses how London’s universities can adjust to the new tuition fees regime

There are 40 higher education institutions (HEIs) in London. That’s a quarter of the total in the UK. The capital has 17 per cent of the UK’s undergraduates and 29 per cent of post graduates. The university sector plays a significant part in London’s economy.

But right now the sector is facing huge uncertainty, and senior university managers are unsure how best to react.

Maxxim Consulting’s recent summit on higher education brought together senior managers and a senior government adviser to discuss the future of the sector.

Fees and flexibility

The new tuition fees regime went live in September 2012 and no one can predict with any certainty what effect the higher upfront fees are going to have on our HEIs. In addition, the government is increasing flexibility in the number of undergraduates each institution can take. There will be flexibility at the top end with institutions able to take more students at “A” level grades AAB or above and there will also be increased flexibility on intake numbers at the bottom end for those institutions charging lower fees. 

What will all this do to student numbers and universities’ income? The talk in the sector is that the pressure will be on the middle tier – universities not in the “premier league” of strong reputations and unable to take advantage of the government’s relaxation on attracting more AAB students. They are also going to find their research funding under pressure.

One possible solution is to go for volume – recruit more students onto each course. But will universities have the facilities to give all students the kind of education they are looking for? The impression that we have is that universities are wary of getting a reputation for “piling them high and selling them cheap”. 

What needs to be done?

  • We will see universities positioning themselves as the leaders in particular subjects, rather than trying to be all-rounders. In the future we will have more specialisation in the sector – and this should be embraced.
  • The government is keen for students to have better information to help them decide, especially as they will be paying dramatically increased fees. So universities will need to be clear on how many contact hours that students will have, the size of classes and be clear about what they are offering their students and deliver. Management information will be a key issue.
  • Universities will also have to focus on their costs and spend their money wisely. A focus on “back-office” administration costs can free money to improve the academic experience but there are some key elements of the back office (the careers service, for example) that need to exist to support students.
  • International students are also a big part of London’s university economy. Attracting students from overseas is a great way to plug the funding gap but there still needs to be some restraint – students come to London for a multinational experience don’t want to find themselves sitting in a classroom dominated by people from only a few, rich countries.
  • Philanthropy should also be considered. In US institutions there is a long held custom of donating to the university that you went to; these universities are shocked at how little English universities receive from donations. Universities will have to approach their graduates for donations far more often than currently as they wean themselves off public funding.

The increases in fees and flexibility will have a big effect on the university sector. Ultimately, universities will need to be much clearer about their strengths and weaknesses and market themselves accordingly.

Jonathan Ruddle is a senior engagement manager with London-based consultancy, Maxxim Consulting. He has more than 20 years experience in business change projects in a wide variety of industry sectors, planning and delivering transformational projects in finance, HR and IT. Jonathan currently heads up Maxxim’s university and finance practices, representing clients including the Smiths Group, Meggitt and Lancaster University.