Mind the money, not the Moocs

Steve Smith warns of looming budgetary issues that could send institutions off the road

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Source: Getty

In 2014-15, Hefce will have very little room for manoeuvre in its funding to absorb any cuts, making it difficult for it to ‘save’ any institution that gets into problems in the emerging market

There is a lot of apocalyptic language around at the moment. And not just in higher education: we are, after all, still picking our way through the aftermath of a financial “tsunami”.

So it was timely for the authors of a recent report on the challenges facing our own sector to couch their analysis in terms of an “avalanche”.

The upheaval forecast by the Institute for Public Policy Research in An Avalanche Is Coming: Higher Education and the Revolution Ahead is based largely on the advent of a new type of online learning - the now ubiquitous massive open online course, or Mooc. Co-authored by Sir Michael Barber (a former head of Tony Blair’s Delivery Unit who is currently chief education strategist for the education giant Pearson), the report warns of a coming era of unprecedented competition in higher education driven by proliferating online opportunities, and it generated widespread media coverage last month.

However, this analysis understates the scale of the challenges that universities have faced in the past, challenges that they have successfully overcome and that, in many cases, have strengthened the university as an institution.

Two obvious examples are the significant changes brought about by the massive expansion of higher education in the past 50 years, and the extraordinary change in the relationship between university and business in the past 20. In both cases, many predicted that the university as we know it would not survive, but it has.

I also think that the likely impact of Moocs is being overstated. That is not to say that they will not transform much of the way in which university education is delivered, but I do not think that Moocs themselves can replace the education offered by or the brand value associated with traditional universities. Not every university will face the same level of threat, mind you; Moocs pose a very different challenge depending on which part of the university ecosystem you inhabit. They also need to be monetised, and to find a way of linking study with assessment.

Other aspects of the IPPR’s “avalanche” forecast need to be challenged, too. While unemployment rates may have been comparable among graduates and school-leavers in 2011, all the evidence shows that by age 24, graduates are far less likely to be out of work than non-graduates.

As for the claim that “the models of higher education that marched triumphantly across the globe in the second half of the 20th century are broken”, just look at the continuing role of the university both as the place where science, medicine, social science, and arts and humanities advance, and as anchor institutions in local communities.

The old adage has it that there is only one thing better than having a university in your city, and that is having two. UK universities are the keystone for future growth and jobs, as well as crucial cultural and civilising institutions. They constitute the second-strongest research sector in the world, and the second most popular destination for international students. In short, I do not think they are broken. But that does not mean that they can stay as they are.

From my perspective, as a vice-chancellor who is required to scan the horizon for signs of danger constantly, there is indeed an avalanche coming, and there are a number of warning signs.


The first is austerity. The challenges posed by the government’s austerity programme are far more significant than is commonly recognised.

From 2010-11 to 2014-15, it is estimated that spending in the Department for Business, Innovation and Skills will fall by 2.8 per cent a year in real terms.

But the public spending cuts are back-loaded. According to the Institute for Fiscal Studies Green Budget, published in February, only 32 per cent of planned budget cuts and 21 per cent of the government’s planned public spending cuts for 2010-15 had been implemented by the end of March.

Core gross domestic product is currently 3.5 per cent below 2008 levels, and the IFS has forecast that by the time we get back to 2008 levels, GDP will be 14.5 per cent below where it would have been had historic growth rates continued.

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