Higher education in Britain is experiencing something of a revolution under Jo Johnson’s tenure as Minister for Universities and Science. The ambitious overhaul that comes with the Higher Education and Research Act 2017 (HERA 2017) is both far reaching and significantly more commercial in its approach. It was marked by the Times Higher Education newspaper:
‘Parliament has passed the Higher Education and Research Bill, clearing the way for the most significant sector legislation in 25 years to further a market approach in England.’
One of the significant measures to note for existing Independent Higher Education Providers (IHEPs) is that there is a drive towards facilitating market entry for new independents. Increasing competition in a fairly competitive marketplace looks to be a measured move by the Government, who have not failed to recognise the impact that IHEPs have on broadening access to Higher Education for under-represented groups.
Alongside the unique curriculum specialisms offered by IHEPs there are also merits in providing more local opportunities for students from lower income families and mature students. Both of these groups do not have the resources to simply move locations and pay for accommodation costs for the privilege of accessing a University course. IHEPs are a crucial mechanism for creating opportunities for all and continuing to upskill Britain’s future workforce where higher level skills are predicted to be far more in demand in the coming years.
The inexorable drive towards higher level skills is demonstrated by the excellent new report ‘The Future of Skills: Employment in 2030’ commissioned by Pearson in partnership with NESTA and The Oxford Martin School report expands upon the work of the UKCES to tackle the zeitgeist issue of automation and the effect this will have on the future workforce. Unsurprisingly, the jobs named as likely to be in decline by 2030 are those that are low or medium skilled and where the report sees stronger demand is in higher level cognitive, interpersonal and systems skills.
We can see that Higher Education institutions hold the key to some looming economic problems for the United Kingdom and the role of IHEPs is fundamental to the achievement of a higher skilled workforce. So, if that is the case, why have IHEPs been placed on an unequal footing to Universities in the recent past? The cap on student fees has meant that Independents have to do just as much as Universities in respect of teaching and learning but with less cash in the system and without the access to lucrative HEFCE grant monies. This is not a level playing field and hopefully, the introduction of HERA 2017 and its regulatory champion the Office for Students (OfT) will help to redress some of that balance. This is clearly a measure for the medium to longer term though and for IHEPs that are finding it difficult to make ends meet right now, and therefore provide a first-class service to their students, what are the solutions available?
The payment installations are in place for the student loan company to deliver funding at two points in the year. This is all well and good but comes with some serious cash flow implications for IHEPs where the majority of cash is received in May at the end of the academic year. At this point, a 5-month period hits where there is a hiatus in cash receipts to sustain the institution until the following October, up to a month after the start of the following academic year. This is a huge challenge for Finance Directors who need to pay fixed costs throughout the Summer. It also constrains growth plans in a period when the institution should be investing in Marketing for the coming intake of sought-after students.
The Nucleus Solution
This is where funding from Nucleus’ Education team can help Independent Higher Education Providers right now. We have worked closely with providers in the sector to structure a solution that creates financial sustainability for their organisation. We achieve this through a strategic, long-term partnership.
IHEPs are faced with a very real struggle to keep themselves afloat, with limited access to the funds that other local authority supported institutions enjoy as a right. This means that in the main IHEPS are fully reliant on the income generated through the Student Loans Company (SLC) and the system of tuition fee loans provided for designated courses.
Here is where Nucleus can come in, with a specialist facility. Instead of relying on 3 payments throughout the year we provide a revolving credit facility based on a forecast of student numbers for the following year. This is a collaborative exercise where we work with your management team to come to a justifiable and achievable target number and then calculate the likely income relating to this forecast. We will then release cash to the institution in the Summer period, prior to the first SLC payment in October and make the funds available through the academic year so an institution can remain financially sustainable. This long-term partnership can then be reflected in returns made to the Office for Students showing that your institution has a long-term solution to ensure that students will continue to have access to high-quality provision.
These are revolutionary times for Higher Education and there are bound to be winners and losers as new players come into the sector and degree awarding powers are being relaxed. It is important that experienced Independent Higher Education Providers keep themselves ahead of the game and retain the hard-won achievements they have made to this point. Nucleus has a range of expertise that spans Higher Education, Further Education and Apprenticeship provision and we have designed bespoke products in collaboration with clients in all these areas. Collaboration is key and we look forward to showing you how we can help drive your aspirations, and alongside that help drive the aspirations of students across the country.