Wednesday, September 21 2022

Competition for places at Britain’s top universities is growing fiercer as falling funding per student forces institutions to cut back on offers despite rising demand, higher education analysts say.

The number of 18-year-olds from England, Wales and Northern Ireland admitted to top-tier institutions has fallen by 12.2% this year, according to analysis by higher education consultancy DataHE.

As freshmen prepare to start their term this week, analysts suggest it is increasingly difficult to secure a place at top-tier institutions due to falling undergraduate funding in real terms due to inflation, discouraging universities from increasing the number of courses.

Mark Corver, director of DataHE and former chief data officer at UCAS, the higher education body, said growing demand for places had “run up against a reality of limited supply at predominantly fee-based universities higher “.

DataHE analysis, shared with the Financial Times, showed that two weeks after results day, higher-fee institutions had recruited 11,430 under-18s in England, Wales and Northern Ireland this year compared to 2021.

The total number of applications to this pool — a rough indicator of appetite, as students can apply for up to five choices — rose from 545,000 to 573,000.

The fall in admissions is partly due to the decline of the most competitive universities after a sharp increase in enrollment last year, when exams were canceled due to the pandemic, which led to record inflation in grades and more students responding to their offers of entry.

Previously, the number of university students had grown rapidly for a decade. On results day last month, UCAS said 425,830 students had been accepted to university or college, the second highest on record and an increase of 16,870 from 2019.

However, Corver said the decline in top-level admissions between 2021 and 2022 showed universities were not expanding to meet demand due to financial pressures.

In August, inflation fell to 9.9% and is expected to reach double digits this fall. However, tuition fees have only increased by £250 since capping at £9,000 a year since 2012.

“They have to balance the books,” he said. “This has led to tactical decisions on admissions for the most expensive students, and a tightening of the supply of welcome places at the universities where people most want to go.”

The Russell Group, which represents top-tier institutions, said universities spend £1,750 more on each home-based undergraduate a year than they earn in tuition and grants, and predicted the shortfall would rise to £4,000 by 2024-25.

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Universities UK, which represents the sector, denied that places are restricted. He pointed out that the number of registrations has increased over the long term and has only decreased compared to last year.

But he admitted that “the erosion of funding for teaching UK students [was] a real problem”. Steve West, the group’s chief executive, last week called for new funding regulations for the sector which were “tight tight”.

Russell Group CEO Tim Bradshaw said it was ‘absolutely not’ that domestic students were being ‘crowded out’, pointing to a 14 per cent increase in the number of 18-year-olds admitted to high-fee universities since 2012 .

But, he acknowledged, if universities continued to suffer from a budget deficit for teaching, it would “inevitably” have an impact on admission, “the quality and choice of students, [and put] pressure on class size.

Vice-Chancellors are looking to increase their income in other areas such as industry partnerships, renting accommodation and hiring higher-paying students.

Charlie Jeffery, vice-chancellor of the University of York, said it was “inevitable” that universities would eventually seek to diversify sources of funding.

For years, institutions have sought to attract international students to fill funding gaps. The number of international recruits – who pay an average of £13,000 a year more than their domestic peers – has risen by 2,440 this year at higher-ranking establishments compared to 2021, although this may partly reflect the easing pandemic travel restrictions.

Charlie Jeffery, Vice-Chancellor of York University
Charlie Jeffery, vice-chancellor of the University of York, said it was “inevitable” that universities would eventually seek to diversify sources of funding. © University of York

Nick Hillman, director of the Higher Education Policy Institute, a think tank, said budget pressures would limit institutions’ appetite to expand and cause them to seek revenue from non-home tuition.

But he added that some universities were looking to make up the shortfall by taking the opposite approach: increasing their total numbers while being “more efficient”. That would mean spending less per student, he warned, which could lead to cost savings such as larger class sizes that could threaten the quality of education.

Figures from UCAS showed that low-fee universities actually increased their number of 18-year-olds at home by 8,060, or 10.3% this year, while mid-fee universities recruited 6, 2% extra.

This caused the total market share of high-fee universities to fall to 32.1% from 36.8% last year.

“It’s the big experiment going on,” Corver said. “They will be teaching these cohorts at a significantly lower unit of actual resources than before – it is unclear whether this will be reflected in the quality of teaching.”

Data Analysis and Visual Journalism by Federica Cocco

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