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The more things change

Professor Zahir Irani discusses the current battle in the House of Lords over reforms to the HE bill

Posted by Hannah Vickers | January 29, 2017 | Finance, legal, HR

What is a university for in the 21st century? Can the principles that have underpinned the Higher Education sector, intellectual quality and academic autonomy, continue to be the paramount factors?

The Government is keen to continue to open up HE as a market involving new and profit-making providers. The Lords are pushing for hundreds of amendments to the reforms including a block on the possibility of institutions being run for profit. A phase of to-ing and fro-ing is likely to be followed by a compromise which perpetuates the lack of clarity and direction.

Problems facing the sector are explicit enough. The dip in numbers of applications in this year’s recruitment cycle (which was predicted to be as high as 10%, but now looks to be closer to 2%), not helped by declining numbers of international students, and the demographic context of fewer 16-18-year-olds in the UK. There is going to be ever-more competition from alternative forms of education and skills providers, hooked into the needs of employers. The employer-led degree apprenticeships are just one example of the shift in the balance of power.

HE needs to be more business-like in how it operates to deal with these challenges. The issue is one of how universities can be re-defined so that business-like practices and academic rigour aren’t in constant opposition to each other. They are both positive qualities that could be working as a single cogent force.

A great deal of change has already happened in terms of universities being ‘corporatised’. It’s there in the time, effort and money invested into marketing, student recruitment and applied research. How many people are involved with the administration of the TEF and REF for example? Robust governance systems are now well-developed, bringing higher levels of transparency, oversight and confidence (and, it has to be said, the same senior-level politics that’s found in large commercial organisations). Financial sustainability is now an accepted norm that underpins the ability of a university to make short, medium and long-term decisions. And the ‘business case’ is now an integral part of university decision-making processes, placing financial and strategic drivers at the centre of the academic case to do things.

In this context, isn’t a profit-making sector the most natural development? Again, it comes back to what a university is - or what we want it to be. There’s a huge difference between changing practical operations and changing the philosophy of what HE is. Universities aren’t businesses and shouldn’t be involved with generating dividends for shareholders but a surplus that can be re-invested into research and the student experience.

Universities need to demonstrate they don’t need to ditch any founding principles, they can be operationally sharp, flexible and adaptable. The role of students as ‘customers’ is a good example. They’re not and shouldn’t be customers (as they suddenly would be in dealing with a profit-making provider). Students exercise consumer choice when choosing institutions, but are then subject to expectations of performance, as they might be in the workplace. So universities need to enhance and re-interpret ’customer care’ in new forms of student care. There need to be healthy attitudes to the importance of generating good levels of surpluses as the basis of re-investment and the resulting benefits to the whole university community. We need to work smarter when it comes to introducing and managing a performance-driven culture among academics, encouraging academics to question activities and their value, not as part of a creeping commercialisation, but in preserving the not-for-profit principles.

Ultimately, universities will have to prove they aren’t the source of financial risk for the state - that they can be a solid, sustainable, high-quality bedrock. It’s questionable whether creating a free, for-profit market, helps with this. With their insights into the workings of commercial organisations and knowledge of the mechanics of strategic change management in particular, university business schools have an important role to play in this critical phase in the history of HE. They can provide models from within their own operations, through different forms of external engagement and partnership, tactics for becoming more employer-friendly, and addressing issues of graduate employability.

Professor Zahir Irani, Dean Management and Law, University of Bradford School of Management, UK

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