There are lots of things I like about traditions – including the opportunity to create new ones. And with the start of this new year looking very similar to the start of last new year, I think a new tradition may be in the process of being created. Specifically, the chance to spend a delightful hour in the company of Professor Janice Kay, CBE, Director of Higher Futures, Advisor to the Kortext Academic Advisory Board and TEF 2023 panel member, chatting about what she sees on the horizon for 2025 in the world of UK higher education. In the run up to Kortext Live, here’s what she had to say.
Consequences of financial crisis are ongoing
Kay observes that the financial crisis for universities is again the most significant factor facing the sector, just as it was in 2024. While the fee uplift from September 2025 is certainly welcomed across the sector, it does not address even short-term financial challenges. The National Insurance increase saw to that. 2025 promises a new HE Bill in England designed to address how the system is currently funded. There are seriously challenging options for a longer-term funding settlement. Linking fees to inflation through the lifetime of parliament will hardly be palatable to students who are themselves living through a cost-of-living crisis. Part-funding of higher education places by government, as happens elsewhere in the world, will be hard for government in the throes of severe economic downturn to legislate. The Institute for Fiscal Studies has recently urged government to give clarity to universities and students about whether it plans to provide regular inflationary increases.
Can structural sector efficiencies create opportunity?
For the sector looking for sustainable futures, the five priorities for HE outlined by the new secretary of state for education are a good place to start. They point to widespread reform, in particular the need for universities to find efficiencies in exchange for potential financial solutions. Kay thinks that we should be in no doubt that ‘efficiencies’ herald fundamental structural change to individual institutions and to the sector itself. She suggests that the ability to harness radical change will define those universities who are able to seize their opportunities and innovate.
Over 80 universities are currently undertaking some form of restructuring. But how many are taking a long-term strategic view? How many are allowing short-term cost savings to dominate decision-making? The new government Taskforce on Efficiency and Transformation in Higher Education starting in 2025 will explore all ways in which higher education providers can work together to deliver financially sustainable transformation. This will require navigating paths through a difficult set of challenges, and these inevitably will include closer working service relationships, more alignment of education and possibly even merger in all its forms for some.
Realising regional relationships
The trend is for universities to work more closely together and that will accelerate in 2025. Chris Day, VC of Newcastle University, has recently highlighted the broad-based coalition of Universities for North East England, and research consortia such as Great South West 4, the N8 Research Partnership and Midlands Engine have been operating very successfully for some years. Such partnerships, however, are a far cry from more radical change. Kay believes that 2025 will be the year in which we see variants of merger happening. A sentinel is the uniting of City and St George’s, both part of the federated University of London. We may also see closer links between HE and FE providers, potentially leading to mergers, possibly following the US community college model.
Logic dictates that most mergers will be regional. Not all, because we will probably see private providers nationally acquiring some institutions in part or whole. Kay suggests that clarifying provision of higher education across regional boundaries could be a more effective driver of regional economies, particularly when integrated with plans and actions of new mayoral authorities. Clearer configuration of higher education provision within a region might align skills needs more closely with regional industrial strategies and help to motivate university civic missions better.
A reducing graduate premium?
According to recent findings from the Resolution Foundation, reported in The Guardian, the graduate premium is falling, down from 2.5 times median salary to just 1.6 times. This overall trend masks different effects across different institutions in different regions. However, the consequences for future applicant demand are a further strong reason to consider how structural change can be used efficiently and effectively to motivate portfolio review, employability and regional and national skills needs.
Fast forward ten years – will redefining academic portfolios, skills mix and student outcomes and reviewing the core workforce and staffing needs in 2025 create a different lens through which to view provision and help define what a university will be valued for in 2035?
Ensuring stronger provision and progression routes between regional institutions, from Level 2 to Level 7 can set the framework for future skills needs, motivating a value to the Lifelong Learning Entitlement and building and bundling qualifications and accrediting prior learning.
Will international student recruitment upturn?
2024 saw a sharp decline in UK international student recruitment, largely attributable to political policy on dependents and anti-immigration rhetoric. This had a knock-on effect. Higher tariff universities were able to recruit more home students to fill holes in business plans. Kay notes that the same may happen in 2025.
Anti-student rhetoric in the UK, Europe, Canada and the US will create more challenges in 2025 for attracting international applicants. We will wait and see what follows from a second Trump presidency. At the same time, Japan, Southeast Asia and Middle East countries are seeking to increase numbers of both outgoing and incoming international students.
The international student recruitment market is increasingly volatile. In the last few weeks, the latest Enroly data has been published showing an uptick in international applications and deposits paid. By contrast, an ongoing slump in applications for international student visas has been confirmed by the latest Home Office figures.
Impacts on governance
Kay believes that the financial crisis coupled with the drive for transformation and efficiency will necessitate changes within university governance. As currently constituted, many governing bodies may well be too big and too focused on immediate and short-term challenges. While Boards are data engaged, she questions whether institutions understand their own data in relation to comparator institutions and whether they operate with sufficient agility.
Navigating the financial crisis will require strong and united executive leadership teams and boards who can provide clear, focused direction to steer the ship through these choppy waters. Those who thrive will be those who grasp the opportunities presented by turbulence, are financially strategic and who can keep a weather eye on ways to improve through innovation.
Impacts on education and student outcomes
Financial stringencies are impacting staffing decisions and recruitment within institutions. How far those academics successfully uploading LinkedIn CVs are representative of the true state of employment in the sector is doubtful. According to a union-maintained list, a third of all higher education institutions in the country are undertaking cost-cutting programmes.
Staffing needs must be carefully considered in the light of priorities around the student experience and with the regulatory focus, at least in England, on student outcomes. While many voluntary severance schemes are in place among UK HE institutions, the very nature of such schemes can result in gaps in provision. Balancing the need to reduce the staff pay burden while maintaining education provision and core services is hard. Kay suggests this is one of the biggest challenges for 2025 and beyond.
At least one area for focus is how to best support students’ academic and personal wellbeing. The next decade, Kay argues, will be defined by how far universities can be effective in supporting mental wellbeing and academic development. The signs are that universities are understanding much more about ways to support student mental health and wellbeing – and doing what they can appropriately to support and retain their students. The potential for innovation could be a critical part of any solution here. Universities need to use digital technologies and platforms better to identify students who are not able to thrive and to work out how to help their engagement, involvement and sense of belonging. There is potential here for shared service provision across institutions for best use of the affordances offered by technology, digital solutions and the provision of information.
Time to Pivot: Harnessing Innovation and Change
Drawing on her experience of the HE sector, Kay is passionate about how digital technologies and transformation can help universities to address financial and efficiency challenges in a thoughtful and strategic way.
While trends she has identified for 2025 look outward across the sector in ways to collaborate and partner with other institutions, Kay is also clear that individual universities are navigating often quite profound financial challenges, while recognising that they must maintain and develop student experience and student outcomes along the way. Most successful will be those who innovate and take advantage of new technologies in resource effective ways.
2025 will be a year in which the sector gets to grips with Generate AI to support better learning and formative assessment. Its potential to date has been largely unexplored and it is clear that students are currently ahead of staff in using platforms and virtual learning assistants.
For Kay, effective student engagement remains at the heart of a meaningful learning experience for all students. Real-time understanding of where individual students are at risk of underachieving or of disengaging irretrievably from their learning is fundamental. This understanding is crucial for the effective channeling of scarce resources to support students through whatever issue might be impacting their ability to study. The StREAM student engagement analytics platform from Kortext provides this real-time information, complemented by an end-to-end intervention lifecycle approach organized around the individual student record. In this way, all staff involved in supporting that student can access the relevant information and help ensure students receive timely and appropriate help at point of need.
Secondly, the soon-to-be-launched StREAM Insights platform provides management information insights for leaders on what is happening around withdrawal at cohort level. The new Insights visualisations will help universities strategically target human and financial resources where they are needed most over the duration of the academic year.
The Kortext product range also includes the student Study application, providing learners with seamless and flexible access to digital resources enhanced with accessibility features and capable of personalization. Universities keen to create space to innovate can also take advantage of Study+ which overlays the Study app functionality with ring-fenced generative AI capabilities to maximise flexibility in student learning. In this way, generative AI capabilities can be effectively integrated into teaching and learning under the control and direction of tutors.
There is no point in thinking about generative AI and predictive analytic tools as bolt-ons to what education currently is. It will just be gamed by students. Think about the way in which you help students to learn and how you assess them and make the most of the efficiencies offered through gen AI.
Kortext Live: Join the conversation
Early in 2025, Kortext, in conjunction with Microsoft, are hosting a series of events to explore how cutting-edge technologies are enabling institutions to address these most pressing strategic challenges.
If you are an HE leader responsible for driving digital transformation, why not join us at one of our events in either London (29th January), Edinburgh (4th February) or Manchester (6th February). If you want to hear more directly from Janice, she will be speaking at our Manchester event.
