How can universities ensure they are the fit for the future?
Alistair Wardell from Grant Thornton talks to Business Leader about the challenges facing the university sector.
Wikipedia states the definition of university to be an institution of higher education and research which awards academic degrees in various academic disciplines. What this doesn’t define is the multidimensional amenities and facilities these establishments have grown to offer, way beyond the education needs of their students.
They are like mini planets, catering for the student species and all they may desire; no wonder there is growing concern as to the future of these majestic establishments.
The day to day running of any university would clearly require a methodology policy for risk management such as disaster recovery and no doubt Vice Chancellors and their boards would be regularly briefed to enable them to implement such a strategy as and when required.
Whilst I doubt that global pandemic would have featured as a likely scenario to ever need addressing it appears most universities have responded admirably to the Covid19 car crash.
I do not wish to take away any credit for the sector’s ability to transform itself so rapidly, but having assessed and protected its key assets, the question of how the industry will now restore and reimage its future will be a far more challenging undertaking.
What for the future?
The myriad of disputes, concerns and questions encompasses so many different facets, including emotional well-being, operations and logistics and how best to deliver sustainable levels of quality education, accessible to all.
Whichever of these resonates with your thinking, and of course there are other aspects too, I imagine for the Vice Chancellor and Finance Director and of course their stakeholders, their key priority has to be the institution’s financial sustainability.
The government’s early May intervention of a £3bn support package provides some welcome relief to the industry, not only does it endorse the importance of universities to our economy and the communities they embrace but it provides a much needed bolster of financial assistance.
This support sounds helpful, but how will this be operated? The timing involved presents its own challenges. With the universities struggling to forecast enrollments and not knowing their final numbers until September, they will not know the impact of the government’s measures until then.
Given, later in September or early October, they are expected to deliver the courses, it is a very short lead time and one that requires clarity on what support is available immediately if recruitment is not at the levels required.
Even with this government backing the commercial pressure is by no means off. The expected constraints on research funding, lack of international students and London Economics prediction of a black-hole in tuition fees of £2.6bn means tough times prevail and despite the government’s aid there are still serious risks to tackle and financial efficiencies to be found.
One way to address such ambiguity is through scenario planning and cash flow re-modelling and from experience I believe this may help. Given the complexity of the situation however and the extensive nature of the potential outcomes to consider, even for an adept business board facing such an enormous task, the situation is likely to present as both perplexing and formidable.
Robust leadership from Vice-Chancellors and Finance Directors will be crucial to steer the university board to embolden innovative thinking and to engineer a successful outcome in taking steps to tackle the imminent threat of financial insecurity.
To try and appreciate the enormity of the task, let us for a moment imagine the university as a troubled business in need of a sophisticated turnaround plan, with skilled and experienced leadership addressing the following:
• How flexible and resilient is the university’s cash flow?
• How robust is the university’s model of the financial implications of students not arriving/returning to the university this term or until next year?
• What sort of analysis can be done to understand the sensitivity of different faculties/schools/colleges to falling income?
• If the university has debt, what is the position of lenders to covenants waivers or changing terms?
• What are the contractual obligations and required occupancy levels within the university’s accommodation
• How will unions and staff respond if they have to start making cuts without full information?
• The government support doesn’t discuss the industry pension scheme which is already significantly underfunded.
Considering all of this, is now the time to step forward and embrace a new model for HE services – one that fits with the world as it is today?
What if the Universities’ leadership pulled down the glass ceilings and created a fresh prospectus that seeks to explore the following:
• What action could be taken to address the requirements of international students wishing to study with a UK university but unable to travel?
• How quickly can AI be utilised, effectively creating ease of access and delivery for a wide variety of different courses to be delivered online and/or in a socially distant manner once the university reopens?
• Why can’t the full student experience be delivered via cross platform encounters such as virtual reality and voice technology?
• Is it possible to replace the shortage of international students through recruitment of working parents on part-time courses, or capturing new markets with bespoke regionally attractive itineraries or working with businesses partnerships for developing employees?
• How about experiential courses, with live delivery – digital solutions, entrepreneurial business management and well-being would all work well in this format.
• Is now the time to consider the need for greater agility and more dynamic delivery within the structure, duration and timing of the courses available?
• Will student’s mental health and well-being increase for the better with the demise of hefty overdrafts and unhealthy lifestyles?
• Who will protect and profile the universities’ reputation to ensure the new curriculum, facilities and services are still as sought after and desired as the previous offering?
Finally, on the subject of commonality, there are many towns whose universities create a sense of place, helping to foster attachment and belonging and generating an ambience that makes the location feel special and unique.
The local brand message is strong and attractive and residents feel a sense of purpose by association. Imagine then a university with no access to international students and limited global research funding, where business as usual is no longer an option.
Is the future bleak or just different?