King's College London

Professor Alison Wolf and Dr Eliel Cohen introduce a new collection of expert essays on the future of higher, further and tertiary education across the UK.

Read the full collection at the link below, or read the contributions as they're serialised on the Policy Institute website over the coming weeks.

The Policy Institute at King’s College London is delighted to be publishing a collection of papers by education sector leaders, as part of its future of higher education programme.[1] All authors participated in a recent workshop at King’s, comparing developments across the United Kingdom, and their papers provide a wealth of detail and analysis. This overview attempts to contextualise and pull together the authors’ insights.

The UK has a university system which, in key respects, is unified across the four nations of England, Scotland, Wales and Northern Ireland. Thus:

• Applicants for undergraduate degrees use a UK-wide portal, UCAS (the University and Colleges Admission Service).
• Academic and research posts have the same structure.
• The academic trade union, the University and College Union, operates UK-wide, as do the unions representing non-academic staff, and the university pension systems.
• All four nations have unified university systems, with no formal distinctions between, for example, technical and general universities, or universities with and without doctoral programmes.
• All universities (and other higher education institutions, such as conservatoires) can participate in the periodic government evaluations of research quality, currently known as the ‘REF’ or Research Excellence Framework.
• All four countries have further education colleges alongside universities, which recruit post-secondary students and, to varying extents, offer higher education as well as lower-level courses.

They also all manifest growing financial pressure on universities (as do many other countries). As Professor Shitij Kapur, Vice-Chancellor & President of King’s, has argued in his paper for this programme,[2] it is questionable whether the UK’s relatively expensive model can be sustained for much longer. Governments are understandably loathe to increase fees (whoever is paying them). Other demands on the public purse are huge and growing, and while the British public has a positive view of universities, they rank low in its priorities for extra spending.[3]

There are also, however, major differences among the four nations’ systems. They therefore provide an opportunity to compare different approaches in an environment with strong system-level similarities.

Four nations

Education (at all levels) is one of the most important devolved government functions. Historically, there have always been differences among the nations. For example, Welsh schools have generally and historically used the Welsh exam board (WJEC) for their public examinations, and the history of Welsh universities (notably the University of Wales) is both relatively recent and unusual. Northern Ireland has retained grammar schools across the entire school system. Scottish undergraduate degrees are longer, with a clear differentiation between ordinary and honours degrees and, uniquely, sub-degree higher national certificates and diplomas are developed and overseen by a government agency. Scottish colleges are post-secondary or ‘post-school’, rather than also enrolling large numbers of upper secondary students, and secondary-level public examinations are also Scotland-specific.

However, in the last two and a half decades, devolution has enabled increasing and consequential divergence among all four nations, including how higher education is financed. Three developments have fuelled this divergence. First, continuing rapid rises in participation have created major fiscal pressures. Second, ideas about how higher education should be organised have also diverged. In England, policymakers and politicians have largely embraced competition and supported direct student contributions, for ideological as well as budgetary reasons. Those who benefit directly, it is argued, should also contribute directly to higher education’s costs. Visible results include the removing of any cap on home undergraduate student enrolments by English higher education institutions, the encouragement of ‘market entry’ by new alternative providers, and the embracing of fees funded through government-backed income-contingent loans to students. These are repaid if and when recipients’ incomes exceed a certain threshold. The other three nations have, to varying degrees, rejected both the underlying arguments and the resultant policies.

Third, the devolved governments currently receive large unhypothecated block grants calculated according to the Barnett formula. While the total size of the grants is derived from English spending on specific devolved areas such as higher education, hospital buildings and nurses’ pay etc, the devolved governments can and do allocate their own spending differently, reflecting their own priorities and beliefs.

Taken together, this combination of growing diversity and shared features offers revealing insights into policy alternatives, most notably with respect to the choice between planning and marketisation, access, support for student living costs, and the creation of tertiary systems.

Planning versus the market

The headline attraction of a planned system of higher education is that it allows governments to control spending, by limiting or ‘capping’ numbers as well as deciding per-student levels of support. However, in the case of UK higher education, this does not play out in a clear or predictable fashion. For example, Northern Ireland has both tight controls on the number of places it supports, and the highest entry rate into higher education for its 18-year-olds. Based on applications through its system, UCAS reported a 40 per cent entry rate in 2023, compared to 36 per cent for England, 30 per cent for Wales and 29 per cent for Scotland. These differences are in substantial part independent of ‘home country’ policies, since students can and do move between the UK’s nations in sizeable numbers, just as they do within a country or globally.

The most striking differences within the UK are between Scotland and England. The number of funded higher education places is capped in Scotland. They are reserved for Scottish students, who pay no fees. In addition, there is also a far more clearly articulated system of progress from further education colleges to university than exists elsewhere in the UK, not least because the Scottish government ‘owns’ the key higher-level qualifications offered within colleges, notably Higher National Certificates and Higher National Diplomas.

However, as both our contributing Scottish university principals (vice-chancellors) point out, Scottish higher education is acutely short of funds. James Miller says in his contribution that the Scottish approach ‘should provide a stable funding environment which aids planning’. But in practice, annual changes in allocations, along with complex ‘outcome agreements’, have made forward-planning very hard. The determination of the Scottish government to keep higher education ‘free’ is increasingly problematic for the universities: and recent work by London Economics showed that in 2024 Scottish universities had the second lowest level of ‘core’ funding per home student of the four nations, behind both Wales and England.[4] But as Edinburgh’s Peter Mathieson discusses in his paper, attempts to have a national debate about university finances are publicly rebuffed.

Northern Ireland also operates with number controls. It does charge fees to home students in Northern Irish universities, but these are currently (2024) set at £4,710 per annum, just over half the level charged in England. Teaching grants are more generous, but the total university income per home student remains significantly lower than in England, and is the lowest of the four nations. At present, almost a quarter of home-domiciled Northern Ireland students study elsewhere in the UK, paying a £9,250 fee to do so. (The comparable figure for Scotland is only about 4 per cent.) The province’s recent history, with its Assembly (parliament) frequently suspended, also means there has been little opportunity for politicians to develop and implement new policies.

In contrast, the recent history of Welsh higher education, summarised by Colin Riordan in his paper, reflects very strongly the changing responses by politicians to changes in English policy, within the constraints imposed by large cross-border student flows. Welsh politicians, like their Scottish counterparts, were very against ‘marketisation’. However, their original policy of holding down the fee for Welsh-domiciled students to well below the English level, with the government making up the difference between this and what other UK-domiciled students were charged, created major pressures on the budget. With other priorities (notably health) demanding spending increases, the total quantum for universities was held constant, and fee payments for Welsh students were made at the expense of research and general teaching grants. This created enormous pressure on universities and, as Riordan explains, was duly replaced: Wales now has demand-driven enrolments and fees which are largely analogous to England’s, though with much more generous support for students’ living costs. However, financial pressures remain. In 2024 there were sizeable cuts in higher education allocations.

Meanwhile, in England, a commitment to income-contingent loans has now been in place for almost 20 years. The system, which covers fees that are paid directly to the universities, was introduced by the Blair government in 2006, and the basic structure today is the same as in 2006. However, in the early years the maximum, and actual fee paid by students, was much lower, and covered only a moderate part of teaching income: the government continued to pay substantial teaching grants. In 2012, fees increased markedly to a maximum of £9,000, and loan terms were also modified. The terms changed again in 2016, 2018 and 2023, while the fee itself, after one rise from £9,000 to £9,250 in 2017, has, as of July 2024, been frozen and declined substantially in real terms. Meanwhile, the direct contribution by government to teaching costs has also declined to a very small proportion of university income. And in the absence of number caps, some universities grew extremely fast, while others struggle to recruit. We can confidently expect yet more changes in the near future.

Access

Although the UK is marked by several distinctive funding approaches, its governments have shared a recent emphasis on improving access to higher education by selected under-represented groups. The focus has been particularly on lower-income students and those resident in economically deprived areas. In Scotland, this has been particularly clearly formalised. Targets for specific demographics are part of the Outcome Agreements signed with each institution as a condition of funding. But in England, too, demographic targets have become very important. When fees were raised to £9,000 a year (maximum), it was on condition that universities charging this level also developed active policies to increase access, developing formal Access and Participation Plans, and set aside large amounts for bursaries. England’s powerful regulator, the Office for Students, has continued to pressurise universities to increase enrolments from economically disadvantaged demographics, and from state rather than independent schools.

Few people, in or outside the education sector, question the desirability of reducing participation differences. However, policies which affect individual applicants’ chances of success inevitably attract attention, and, often, controversy. This has been especially evident in Scotland, with its central control of ‘home’ places. There is widespread discussion (and criticism) of the impact on middle-class students, especially when the policy produces an outcome such as Edinburgh’s in 2023, when every single entry place to its prestigious Law School went to a student from a designated disadvantaged group.

And, as so often, there have been unintended consequences too, especially for further education. In his paper, Jerry White, an experienced and prominent English college principal, explains how a combination of marketisation, which fuels highly active recruitment of students, and the pressures on universities to widen participation, have combined to reduce college-based higher education provision. Similar developments are evident in Scotland, in spite of its carefully structured system: Audrey Cumberford discusses how ‘Over a 10-year period the number of FTE full time HE level students in the college sector has reduced by almost 20 per cent.’

These developments deserve attention. Falls in student numbers mean that many college courses become unviable. So while rhetoric embraces lifelong learning and flexible provision, the reality is that choice has diminished for the many adults who cannot attend a full-time university course. Moreover, there are financial implications. College provision in Scotland is funded less well than university provision. From a college principal’s point of view, this is clearly problematic (and indeed unjust). But from a social point of view, less expensive, high-quality provision is clearly desirable. Meanwhile in England, as Jerry White notes, a huge growth in ‘Year 0’ or Foundation Year courses, often recruiting lower-achieving young people who would otherwise complete a (free) additional year in college, means that these students are taking on a whole additional year of debt.

Support for student living expenses

Most of the discussion of higher education finance, within the sector and in the general media, focuses on fees. But for students, living costs or ‘maintenance’ expenses, are at least as important.

As Colin Riordan notes, Wales is the UK nation which has taken maintenance support most seriously, in good part because it was demonstrably the ‘doorstep issue’. Wales now offers easily the most generous support in the UK, with a combination of grants and loans which takes all students to living-wage level. For those from households in the lowest income band, this can mean a grant as high as £10,124, with a loan of up to an additional £5,046 – and everyone gets a grant of at least £1,000. However, this inevitably has placed pressure on direct funding to universities. London Economics’ calculations, which were carried out ahead of the most recent cuts in funding for Welsh universities, show them to be even more dependent on fee income than English ones.[5]

Elsewhere, loans and grants vary by jurisdiction, as detailed in a recent House of Commons briefing.[6] Currently, Scotland combines small grants for those with family incomes under £34,000 with income-contingent maintenance loans. Part-timers are largely ineligible. England no longer offers any grants, but treats part-timers more generously than Scotland does. Northern Ireland offers a combination of income-related grants and loans.

Tertiary aspirations

The nations of the UK are alike in sharing a rhetorical, and indeed a genuine, belief that both enhanced opportunities for their citizens, and economic success, require ‘tertiary’ thinking: that is, for policies that look at higher and further, or academic, technical and vocational education, in an integrated way. Wales has just established a Commission for Tertiary Education and Research,[7] designed to bring higher and further education and research together. Scotland has had a single funding council for higher and further education since 2005. The previous English government had an express policy of bringing further and higher education closer together, notably through the introduction of a Lifetime Learning Entitlement (due to be launched in 2025),[8] which can be used for any approved credit-bearing courses in colleges and universities. England also, unlike Scotland, funds a given qualification or qualification level the same way whether it is delivered in a college or a university.

However, as Audrey Cumberford and Jerry White make clear, the rhetoric and the reality have been moving further apart, rather than closer together, in recent years. Higher education enrolments in English and Scottish colleges have declined. There has also been no reversal of the recent trends towards an ever-more youthful undergraduate cohort. Wales’ initiative may bear fruit, but at present there is very little higher education in Welsh colleges, and little obvious sign of a unified sector emerging. The most positive recent developments are probably in Northern Ireland, where, independently of government action, the Open University has become an increasingly active collaborator with the college sector.

Now what?

What the UK demonstrates, in each of its constituent nations, is that the funding of modern higher education is highly political, and consistently unstable. Financial strains are increasingly evident in all four countries, and indeed in the Republic of Ireland, in spite of its higher recent economic growth. Universities’ favoured source of income growth in recent years has been recruitment of international students, whose fees are not regulated. This is now under strain, because of wider concerns about migration: again, the UK is not alone, with both Australia and Canada recently introducing numerical caps on international student numbers with little or no notice.

Two of the papers here focus on how the sector might address these challenges, other than by campaigning for better funding. Huw Morris, who has spent many years working on Welsh higher education policy, focuses on the potential for greater efficiency. This is not a favourite topic for either university representative organisations or higher education and college unions, but Morris is not alone in arguing that savings can be made. The OECD’s Andreas Schleicher pointed out,[9] in a recent discussion as part of the Policy Institute’s future of higher education programme, that many observers, here and in other countries, think there is room for substantial economies in the sector without sacrificing quality.

Michael Shattock, in his piece, argues that we need radical structural change. Shitij Kapur also highlighted structural reform in his paper for this programme, but Shattock’s emphasis is specifically on regionalisation. This is a key and necessary step, he argues, in order to achieve the structural diversity and innovation that the sector requires. Certainly these papers clarify how strongly the organisation of higher education responds to the priorities and political philosophies of its funding jurisdiction. And we can learn a great deal from the different choices made within the UK, even though, unfortunately, no country provides clear answers on how higher education might best evolve.

[1] King’s College London. (2023). The future of higher education. https://www.kcl.ac.uk/research/the-future-of-higher-education

[2] Kapur, S. (2023). UK universities: from a Triangle of Sadness to a Brighter Future. The Policy Institute at King’s College London. https://www.kcl.ac.uk/policy-institute/assets/triangle-of-sadness.pdf

[3] Duffy, B., Cohen, E. and May, G. (2024). High esteem, low priority? Perceptions of UK universities and their importance in deciding the general election. The Policy Institute at King’s College London. https://www.kcl.ac.uk/policy-institute/assets/high-esteem-low-priority-uk-universities-and-the-election.pdf

[4] London Economics. (2024). Examination of higher education fees and funding across the United Kingdom. https://londoneconomics.co.uk/wp-content/uploads/2024/02/LE-Nuffield-Foundation-Cross-country-comparison-of-HE-funding-FINAL.pdf

[5] Ibid.

[6] Atherton, G., Lewis, J. and Bolton, P. (2024). Higher education in the UK: Systems, policy approaches, and challenges. House of Commons Library Research Briefing. https://commonslibrary.parliament.uk/research-briefings/cbp-9640/

[7] Commission for Tertiary Education and Research. (2024). https://www.gov.wales/medr

[8] Department for Education. (2024). Lifelong Learning Entitlement overview. https://www.gov.uk/government/publications/lifelong-learning-entitlement-lle-overview/lifelong-learning-entitlement-overview

[9] The Policy Institute at King’s College London. (2024). The future of higher education: in conversation with Andreas Schleicher of the OECD. https://www.youtube.com/watch?v=7ZXeHizyBPw