Balancing business

Universities need to balance academic aspirations and business realities, explains Professor Maurits van Rooijen

What lessons have we learned over the last academic year that will help us prepare for the year ahead?

Last year showed that universities, more than ever, need to balance academic aspirations and business realities. For research-led institutions, the business reality is that they should have access to significant endowment funds if their success is to last; so they should shift attention to enlarging such funds, mainly from donations. Institutions that are more tuition led have to be more market focused, faster, more agile and competitive in order to support their academic aspirations or even to survive.

Institutions need to be much more explicit to what their realistic academic aspirations and strengths really are and what, therefore, the related priorities are on the business side – because significant public funding in the medium term cannot be taken for granted.

What were the major developments during the last academic year? Has it been a successful year for UK HE?

Last year was another year in an ongoing transformation process for the UK HE sector. The actions of the Home Office in relation to overseas student numbers showed that while some universities have become more realistic about their funding sources, many institutions are yet to sufficiently diversify their funding sources. The last academic year showed that this process of diversification is going to have to accelerate in the coming years for many institutions.

Removing the cap on student numbers is one of the most debated topics in UK higher education. How will this affect the UK HE scene this year? 

It is a sign that the UK higher education sector will be ever more competitive in the coming year, especially for institutions that are tuition led. The institutions that get their models right and attract students will see themselves prosper, whereas those that don’t will have difficult time. 

It has been reported that grants given to students could be cut as part of savings the Department for Business needs to make, what do you think of this, and what impact will it have on UK HE overall?

The Chancellor’s announcement in his Budget on student grants is a realistic acknowledgement of the financial constraints facing the national HE budget. As student numbers go up, grants become an ever bigger burden for taxpayers and divert money away from other areas of higher education. Ultimately, I don’t expect this policy to have a negative impact on the sector as a whole.

UK universities are constantly having to compete with international institutions to stay at the top of the world rankings, and attract the best students from all over the world. Are we on the right track to stay competitive, or are there potential pitfalls ahead?

Yes, for some research led institutions, academic talent is crucial. But many British universities risk falling behind in the global race unless they tune in to the importance of developing and harnessing the skills that matter to businesses, or allow alumni to release their entrepreneurial ability.

I think the debate around ‘best students’ is actually the biggest pitfall. So many UK universities are becoming so obsessed by fighting for the best academic talent, that they are in fact neglecting other skills that are crucial to both universities and employers – such as leadership and entrepreneurial potential.

The case needs to be made that migration isn’t just a Home Office issue – it’s an economic issue that departments like BIS should be concerned about.’

The government has pledged to “reform the student visa system,” but universities have previously warned that the drive to reduce net migration is harming recruitment of international students. What can universities do to help push their agenda forward?

The case needs to be made that migration isn’t just a Home Office issue – it’s an economic issue that departments like BIS should be concerned about. And that case should be made not just by sub-sector interest groups, but by the sector as a whole in partnership with other sectors to which the issue is crucial (which is practically every business sector!).

There is a huge risk that the government could get its reforms wrong either by tightening restrictions on groups of students who provide huge benefit to the UK economy or by making the system overcomplicated. 

The Prime Minister has pledged to hold an in-out referendum on the UK’s EU membership by 2017. What does this mean for UK HE?

The EU works well for the educational sector in the UK. We can attract talent from across the EU, whether staff or students, without Home Office interference. We offer successful mobility opportunities and have embraced sensible harmonization, such as the European Credit Transfer and Accumulation System. We benefit greatly from research funding. This is not Brussels driven, it is very much the result of support from within the sector, showing the European project at its best. Whatever the outcome of a referendum, we shall need to safeguard all this.

What are the biggest challenges facing the sector for the next year?

Different institutions face very different challenges, but the overall biggest challenge remains that we have more students willing and able to study than actual places.

Professor Maurits van Rooijen is the Chief Executive of the London School of Business and Finance.

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