Professor David Eastwood
Chief Executive
Higher Education Funding Council for England
Japan-UK HE Collaboration Project‘Higher education and the English regions’
8 June 2007
1England
1990-2007:
A transformedhighereducation
sector2

Timeline for English higher education•Funding declining to 1997•

The impetus of the Dearing Report on funding for highereducation (1997)•

Higher Education White Paper 2003•

A new settlement – Higher Education Act 2004 and variable but
regulated tuition fees•

Leitch Review of Skills 2006 - higher education as a key
contributor to the skills challenge•

Review of higher education funding reforms in 2009.
3

Participation in Higher Education
4540

England HEIPR = initial participation rate for England population aged 17 to 30years and includes part-time students - for full description see DfES SFR

3530
25

GB API
England HEIPR

20
1510

GB API = Undergraduate Full-time and Sandw ich entrants under 21 asproportion of average number of 18 and 19 years olds in the population.

52005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
1968
1967
1966
1965
1964
1963
1962
1961

04

DfES funding and students
DfES publicly planned unit of funding(real terms 2006-07=100)
9,000

grant
grant + public fee
grant + public fee + private regulated fee
grant + public fee + private regulated fee + capital

8,500
8,000

£ per FTE student

7,500

Student FTE

7,000
6,500
6,000
5,500
5,000
4,500
4,000
198990199091

199192

199293

199394

199495

199596

199697

199798

199899199900200001

200102

200203

200304

2004052005062006072007085

UCAS applicants 2002 - 2007

6Deflated England HEI research income (2005-06=100)
4,000

3,500

3,000£ million

2,500

Private charities, industry etc
Research councils and other public sources

2,000

HEFCE

1,500

1,00050001994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 200595
969798
99
2000
01
02
03
040506

A period of transition for our sector• Changing balance of public and private funding for HE• Introduction of variable fees in 2006, but underlying student
demand for HE remains strong• Ensuring the financial sustainability of the sector• Increasing and widening participation (target of 50% participationby 2010)• Higher level skills target of 40% by 2020
• Maintaining the quality of the student experience (introduction ofthe National Student Survey in 2005)• Ensuring research competitiveness• Embedding ‘3rd stream’ activities and developing business-leduniversities• Ensuring excellence across a diverse HE sector

8Demography
Chart 5: Effect of social class changes on HE entry
110

Entrants (2005 = 100)

105

100

95

90

85
2005

2006

2007

2008

2009

2010

2011

2012

Simple population estimate

2013

2014

2015

2016

2017

2018

2019

2020

Social Class segmented estimate

Source: UK Office for National Statistics; HEPI report summary 22 – March 2006

9

Role of HEFCE in this Climate of Change•

Universities are independent bodies, free to raise money from othersources•

HEFCE is the major funder of HE - seeking to balance block grantand special funding streams•

Statutory responsibility to advise Government on the needs of HE•

Working in partnership with a range of stakeholders•

Maintaining the highest standards of public accountability– risk based approach•

Protecting the public interest in HE•

Promoting best practice•Commissioning research to inform policy development•

A modern and sensitive regulator with vision.

10Size andshape of thehighereducation
sector1112
Does not sum to 100% due to rounding

Main components of HEFCE grantin 2007-08 (£7,137 millions)449

Teaching and WP

738
25

Research

1,415
4,510

V. high cost andvulnerable science
Capital funding
Special funding13

A high performing higher education sector• Although the UK has only 1% of the world’s
population, it carries out 5% of world research andproduces 12% of all cited papers. UK ranks second in
the world to the USA on research• Overseas student numbers and fee income has grown
rapidly in past decade: £386M to £1,215M• Our HE institutions are worth £45 billion to the UK
economy on a public investment of £15 billion.

14

Essential characteristics of English higher
education• Applications are buoyant, student satisfactionlevels are high and retention is good
• Blue skies and applied/translational research• Nurturing and developing high level skills• The social and cultural value of graduates• Widening access helps create a more inclusive,
socially just and enlightened society• Employer and SME engagement• Institutional autonomy.
15

The Englishregions

16

UK Government policy since 1997

• Devolution of powers to assemblies andgovernments in Scotland, Wales and NorthernIreland• Establishment of Regional Development
Agencies, with the objectives to:–––––Further economic development and regeneration
Promote business efficiency, investment and competitivenessPromote employment
Enhance development and application of skills relevant toemployment
Contribute to sustainable development(Source: Regional Development Agencies Act 1998)17

Government public service
target“Make sustainable improvementsin the economic performance ofall English regions by 2008 andover the long term reduce thepersistent gap in growth rates
between the regions….”(Treasury, Department of Trade& Industry & Department ofCommunities & LocalGovernment)18

English Regions: Population
Population in 2005 (000)(Source: UK Office of National Statistics)

Yorks

W
est
N
East
S
E
ast
SW
est

N

Lo
ndon

East

M
ids
E

W

M
ids

9000
8000
7000
6000
5000
4000
3000
2000
1000
019

English Regions: RDA Funding
RDA budget allocations - £ per person(Sources: UK Department of Trade and Industry, UK Office ofNational Statistics)
120
100
80
60
40

ks
Yort
W
esS

SE

asttEasNtW
esNnndo
Lo

ids

EastM
EWM

ids

20020

English Regions: Economic
Performance
Gross Value Added 2005 - £ billion(Source: UK Office of National Statistics)
200180160140120100806040200
W Mids East

E Mids London N West N East S East S West Yorks

21

Higher
Educationand theEnglishregions22

English Regions: Students
Full-time equivalent HE student numbers* (2005-06)
300,000
250,000

FTEs

200,000
150,000
100,000
50,000
0
North East North West Yorkshireand theHumberEastMidlands

WestMidlands

East ofEnglandLondon

South East South WestRegion

Higher education institution

Further education college*Open University students excluded
23English Regions: HE Participation% of Adults Qualified to Level 4
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
W Mids EastE Mids London N West N East S East S West Yorks

24

HEFCE and the regions•

There are local, regional, national and international dimensions
to the work of all English universities•

HEFCE is a national funding agency and its core funding is‘blind’ to the government’s regional policy•

Notwithstanding this, the goals and challenges of HEFCE,universities and the regions intersect in many ways•

Discretionary funding (strategic development fund) reflects avariety of priorities, including regional priorities and co-funding
with regional development agencies

25

Case Study (1):Increasing Participation in Suffolk

26

Ipswich waterfront – location forUniversity Campus Suffolk

27

University Campus Suffolk• UCS due to open its door to students in 2007-2008• Investment of £200 million including £15 million
contribution from HEFCE• UCS student numbers expected to increase from3,500 in 2007-08 to 7,500 by 2015.

28

Case study (2): Enhancing HE Capacity and Capability
in the Thames Gateway•Context: 160,000 new homes and 180,000 new jobs planned by 2016; site ofthe 2012 Olympics•Lifelong Learning Networks: promoting progression to higher education Thames Gateway (Creative and Cultural Industries); Kent & Medway; East ofEngland•

New University Centres: bringing higher education to low participation areas- Universities of Kent and Greenwich at Medway; Birkbeck East; University ofEssex Southend•

A Centre for Knowledge Exchange: providing a route for businesses toaccess university expertise29

Case study (3): Developing Higher Level Skills inthe North East• Context: a region with low HE participation, highunemployment and low productivity• Employer-led skills: HEFCE-funded ‘pathfinder’enabling universities to work with regional ‘skills
brokers’ to meet workforce development needs• Lifelong Learning: HEFCE-funded ‘skills network’
securing progression from vocational qualifications
and the workplace into HE30

Case study (4): Developing a Global
University in Manchester• Two research-intensive universities inManchester:– Victoria University of Manchester, founded out of Owens
College in 1880
– University of Manchester Institute of Science & Technology(UMIST), originating from Manchester Mechanics Instituteand established as an independent institution in 1955

• Merger of the two institutions in 2004 with £20m fromHEFCE, £10m from Office of Science & Technology
and £35m from Northwest Regional Development
Agency31

University of Manchester
Student Numbers (Source: HESA)

2003/04

Im
pe
rial

U
C
L

C
am
br
id
ge

O
xford

2004/05

UM
IST

M
anches
ter

45000
40000
35000
30000
25000
20000
15000
10000
5000
032

University of Manchester
Academic Staff (Source: HESA)

Im
pe
rial

U
CL

2003/04
2004/05

OxfordManchesterUM
ISTCam
br
id
ge

4500
4000
3500
3000
2500
2000
1500
1000
500
033

University of Manchester
Research Income £000 (Source: HESA)

Im
pe
ria
l

U
C
LO
xf
ord

2003/04
2004/05

U
M
ISCT
am
br
idge

M
anchester

200000180000160000140000120000100000
80000
60000
40000
20000
034

Universities and the regions: lookingforward• The university is the most significant creation of thesecond millennium• Key role in providing skilled people to the regions• Centrality of blue skies and close-to-market research• Universities can do more than respond to regional andsub-regional economic priorities: they can shape anddrive them

• Universities can become beacons for their cities andregions in a century of innovation

35