What does the Journey to a Million mean for the nature of competition in higher education?

Competition has been a feature of UK higher education for a long time, and competing for students, and the funding that comes with them, is nothing new. 

What is more recent is the intensity of that competition, accelerated partly by economic pressures on higher education institutions, but also as a result of government policy. The lifting of the student numbers cap in England from 2012 led to more institutions being able to compete for more students, and the Higher Education and Research Act 2017 sought to encourage new providers by the creation of a level regulatory playing field. The 2016 White Paper ‘Success as a Knowledge Economy’ that led to the 2017 Act explicitly sought to encourage competition, casting it as a force for good in driving up quality.ⁱ 

The arrival of a projected one million applicants by this decade is unlikely to change this competitive environment for providers. To date, the substantial expansion of student numbers since the 1960s has been more than matched by the substantial expansion of provision. That pattern of expanding provision to meet increasing demand is unlikely to change by the end of the decade. But what may well change is the nature of the competition.

Segmentation

As student numbers have grown over the last few decades, so has the diversity of students’ backgrounds and their expectations. In the 1960s students came from a small and largely homogenous demographic, and most undergraduate degrees looked correspondingly similar. Now, with nearly half of all young people in the population choosing higher education, that large and diverse student group are looking for quite different things. The traditional full-time undergraduate degree has proved exceptionally resilient and will undoubtedly continue to be the first choice for many, but it represents just one model amongst many others. 

As the sheer number of applicants grow, so will the diversity of this group. Expansion may include more older people looking to retrain and upskill — particularly as the economic downturn entrenches.ⁱⁱⁱ Many students whether young or old are likely to want to study while working, probably on a part time, modular basis. There is growing appetite for degree apprenticeships. Employers are consistently voicing concerns about the lack of technical skills.ⁱⁱⁱⁱ Accredited, personalised modules, at a fraction of the price of a full undergraduate degree, are likely to look increasingly attractive to many. The government’s view is that there are a substantial number of people who have considered part time and/or mature study but have not been able to take it up due to concerns about finance, personal commitments, and lack of relevant information.^iv 

In the past, it is largely the absence of an attractive and sustainable funding model for modular technical skills provision, from both the student and provider perspective, that has acted as a brake on expansion, and the challenges of funding and regulation that have constrained degree apprenticeships. But assuming that the government’s recent higher education reform and lifelong loan proposals^v are delivered (in England), then we would see better funding models. Provision may then expand to meet demand for modular/technical courses.

The million applicants in 2030 will therefore be likely to be studying in an even greater diversity of provision. Those institutions who will flourish will be those who are confident in their mission and respond to emerging expectations with a distinct and targeted offer. The generalist university that teaches all things to all students could only have existed when the student demographic was narrow and small. As economic pressures combine with increasing student demands for quality and personalisation, so providers will respond by focusing on their mission. The sector is already highly differentiated, and as we move towards one million students that differentiation will increase further. Competition for students will remain fierce, but it will be segmented.

Collaboration and competition

The UK higher education sector has always been good at collaborating while competing, whether through partnerships based on research synergies, or regional collaborative teaching provision. There have been pressures, particularly between higher and further education partners, but generally collaborations have continued to flourish, and interesting federated and group structures have emerged, often including industry.^vi Given relentless costs pressures and increasing segmentation, some predict that we are likely to see more partnerships and federated structures emerging, potentially operating at an international level, and offering seamless transfers for students between partner institutions.^vii This is a particularly likely scenario if high quality modular provision becomes financially viable. Instead of inter-institution competition, we may see more inter-federation competition.

Digital competition

Digital provision predated Covid, but the pandemic revealed how attractive and accessible some elements of digital higher education could be, particularly when offered alongside face to face provision.^viii This was notably the case for students with disabilities, with family or other commitments, or who were studying at the same time as working. We are also now seeing significant investment in digital provision, with global e-learning expanding year on year.^ix Modular provision in particular lends itself to digital provision, with collaborating partners offering different elements of face to face and online teaching and support.

The growth of digital provision will cut across already segmented competition. A digital provider based in the US or India can compete for UK-based students. The geographical constraints that have marked out institution’s historic territories may start to look vulnerable. 

Constraints on competition

Competition has undoubtedly led to higher education institutions being more responsive to student demands. But alongside the benefits, we have also seen a well-documented increase in marketing budgets and assertive promotional activities.^x League table performance, with all their damaging distortions, form a central pillar of marketing strategies. In some cases, a gap is emerging between marketing material and reality. It is unsurprising that the English regulator, established by the same 2017 Act, is taking an increasing interest in this area.^xi 

As we look forwards to welcoming one million applicants by the end of the decade, competition will continue to drive responsiveness and innovation. But to be a force for good, that competition will need to be balanced by robust regulation that responds to an increasingly segmented, digital and modular landscape. We will also need to be aware of the danger of segmentation creating a confusing maze of options that will be more easily navigated by students from more privileged backgrounds, so further entrenching existing social divides. Competition will therefore also need to be balanced by targeted information, advice and guidance, that reflects the different backgrounds and aspirations of students, and provides them with targeted guidance and support. 

---

ⁱ“Competition between providers in any market incentivises them to raise their game, offering consumers a greater choice of more innovative and better quality products and services at lower cost. Higher education is no exception.” Department for Business Innovation and Skills (May 2016), Success as a Knowledge Economy: Teaching Excellence, Social Mobility and Student Choice.

ⁱⁱ”2020 saw significant growth in mature student acceptances, reflecting a demand or up- and re-skilling as the economy entered recession… Mature student growth is set to continue…“ UCAS (September 2021), Evidence to Lifelong Education Commission.

ⁱⁱⁱSee for example, Confederation of British Industry (July 2021) Skills for an inclusive economy: CBI/Birkbeck Education and Skills Survey 2021.

^ivUK Government consultation (24 February 2022), Lifelong Loan Entitlement.

^vIbid.

^viGoogle’s partnership with Northeastern University is an interesting example: “the partnership… enables learners who complete Google’s IT Support Professional Certificate to receive up to 12 credits towards a Bachelor of Science in Information Technology at Northeastern…” News@Northeastern (September 2018), Google’s IT support professional certificate can now count toward a degree at Northeastern University.

^viiEY (January 2022), Are universities of the past still the future?

^viiiOffice for Students (October 2022), Blended learning and OfS regulation.

^ix“The global e-learning market size…growing at a CAGR [compound annual growth rate] of 14.22%” Arizton (July 2022), Global outlook and forecast 2020-25.

^xSometimes attracting the attention of the Advertising Standards Authority — for instance ASA ruling 7.9.202. Accessed January 4th, 2022.

^xiOffice for Students (November 2022), New Ofs-National Trading Standards partnership to protect students’ rights as consumers.