Higher Education funding: Overcoming the big challenges

Posted by Tribal Group


Five key figures from UK Higher Education gave their observations and opinions on what universities are likely to face against the backdrop of a global pandemic that only serves to exacerbate cutbacks and accelerate losses. 

With spiralling debt, the Augar review demanding reform, a reduction (in the short-term) in non-EU students and £100Ms lost from tuition fees and teaching grants – the sector could be forgiven for feeling sorry for itself. 

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Prof. Ed Byrne, outgoing Principal of King's College London paints a more positive outlook. He gives us these thoughts: 

"Public and private benefit for domestic students, should it be explicitly recognised up front in the funding model, especially for undergraduate students with the government contribution up front across the board as in Australia."

“International students paying higher fees are a good thing but should be capped at reasonable levels for institutions that accept public funds."

"The real indirect costs of public research should be covered for high quality research - government funded research and (in general) all research at Research Council level. Some flexible funding should be continued, and if possible expanded. As a corollary, University research should become increasingly not totally, but increasingly objectively aligned as much as possible with national needs around productivity and then in the UK's needs around the new research road map."

"Placing almost all public research funds (or the great bulk of it) in universities as currently happens in the US, Australia and UKWe're now in an age, however, where public funding needs to be even more aligned with national and international need. The research outputs needed in so many areas are massive. If universities are going to continue to receive the bulk of research funding from key western countries, I believe strongly they need to align more in their outputs with the areas of key need and that means alignment with national productivity and with SDGs (sustainable development goals)."

Nick Hillman, Director of the Higher Education Policy Institute gave us some reasons to be cheerful (and some not): 


  1. HE should not lack confidence in what it does, but this might not be a good year.
  2. The rush to higher education in 2020 does not mean the sector has won the debate on its value. 
  3. Institutions that entered the [COVID-19] crisis in a weaker position are those that will exit it in a weaker position.
  4. We need to focus on non-continuation rates even more than ever this year – even though the UK has the lowest drop-out rates in Europe.
  5. Town vs gown relationships are sometimes fractious, but we have seen students step up to support communities during lockdown.
  6. The sector has not (overall) had a ‘bad crisis’ but we do need smarter lobbying of ministers.
  7. University research is proving itself like never before: KCL plan to conduct 30,000+ COVID-19 tests per week.
  8. We are reminded how interconnected higher education is with the rest of the country and the world. 50+ world leaders are UK HE educated. That is something to be immensely proud of!
  9. The pandemic reminds us education is about recognising individual achievements and societal benefits, education is not about being average, it’s about striving for the best you can.
  10. COVID-19 has raised interest in government and what it does and will also push student voters up. 

Other things noted by Nick were that [especially new] students may struggle to integrate and therefore flourish when starting university in 2020. There are some fantastic support services out there and some great early warning initiatives. Nick also reflected on the question of Degree Apprenticeships and their continued relevance as a reflection of choice for a young person. Apprenticeship numbers have been falling before the global pandemic and they require wholehearted commitment from industry as well. The jury is out but young people need more choice, not less! 

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Dr Greg Walker, CEO for MillionPlus highlighted that sustainability is definitely in the student interest and in fact, is hugely important given that student numbers are increasing by 2% at a time when many expected a reduction.  

There is the need to realise that students pay ‘university fees not ‘tuition fees. Tuition is [the most important] part of the overall experience of university and therefore we attribute a high proportion of the cost to that. It’s unfair to attribute it all to tuition when talking about value. 


Greg also busted a few funding myths, which is always nice! 


Myth 1: There is ‘no level playing field’ between HE and FE or other providers. 

This is NOT true. 

Myth 2: That university employers can resolve pension cost issues themselves. 

This is NOT true. 

Myth 3: That £9,250 is generous support for HE studies so fee cap freeze is needed. 

This is NOT true. 

Myth 4: Hybrid/blended learning is cheaper to deliver than face to face learning (in the context of COVID-19)  

This NOT true. 


Following Greg Walker, Prof. Peter Mathieson, Vice-Chancellor of the University of Edinburgh gave us some real eye-popping insights into the costs of running large, Russell Group university with running costs of £1.1bn a year and just where to find £90m a month to run such behemoth institution. Something many of us had little grasp of. 

Student fees: A reduction in international students leads to a drop in revenues. With approximately 10,000 last year, this presents a sizeable hole in revenue. 

Philanthropy: Just recorded the best year at 4of yearly income (£40+m) 

Research and intellectual property: This must be protected rather than stifling research commercialisation development of intellectual property as currently happens due to bureaucratic processes. Everyone is hoping they’re sitting on the next Google or WeChat   

Links with business and industry: Potential for universities to diversify. KU Leuven, which has really substantial income from industry and Commerce in Flanders and is a model that we're interested in emulating and learning from. Business and industry should not be seen as an ATM however – building mutually beneficial links is a must.  

Pensions, Brexit, sustainability, geopolitics, the climate emergency: All of these factors place a huge financial pressure on the university, and this is way before to the COVID-19 pandemic. Now is the time to think about how all of these intersect and what to do about them. 


Ending the discussion, Sir Anthony SeldonVice Chancellor of the University of Buckingham talked in detail about the 4th Education Revolution and what that entails. Using the latest technologies and pedagogical research to enrich teaching, learning and assessment. He did this with a particular focus on A.I. and how this will impact all stages of learning from the selection of appropriate material for teaching to the overall assessment of student performance and suitability for next levels of study/employment. 

A.I., characterised as the ‘fourth education model’ offers a route to personalised learning that adapts to the preferences and needs of the individual. Sir Anthony continues, highlighting a number of reasons why Higher Education must sit up and take notice of the possibilities of A.I 

  • Your competitors are! First to market is a powerful driver for success 
  • It will enrich the student journey and advance research 
  • It is remaking society and the skills needed for graduates to follow the careers they want 
  • The jobs of the future will be dramatically changed by it 

 (the comments in this article were originally made at the Public Policy Exchange virtual event: Overcoming Funding Challenges in Universities) 

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