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Universities UK

Contribution to the DIUS State of the Nation Review

Demographic change and its impact on the higher education sector in England

October 2008


Table of contents

Introduction

3

Part 1: Demographic data

4

The significance of demography in projecting higher education student numbers

5

Population trends

7

The young population of England

8

Differential change in the English regions

9

The young population of the other UK countries

10

The young population of the EU

11

Projected student populations

12

Factors that may affect the overall projections

15

Part 2: Response of universities to variations in demand arising from demographic change

18

The impact of demographic change on different student markets

18

The likely response of universities to the projected pattern of demographic change

23

Challenges

26

What should policymakers do to help universities respond successfully?

28

What can universities do to help policymakers?

29

Appendices

31

Notes

36

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Introduction 1. This is the submission from Universities UK, prepared at the request of the Secretary of State for Innovation, Universities and Skills, as a contribution to the demographic work stream of the DIUS review of higher education. It examines the impact of the currently projected demographic changes over the next twenty years on demand for higher education i

in English higher education institutions . 2. The first part of the submission analyses the impact of demographic changes over the next twenty years on student enrolments using the latest available population projections from the Office for National Statistics (ONS). Using these projections, it concludes that higher education in England faces significant demographic change over the next twenty years amongst the age groups from which it traditionally recruits full-time and part-time undergraduates. In particular the number of 18- to 20-year-olds who make up over 70 per cent of entrants to full-time undergraduate programmes is projected to fall from 2009 to 2019 before rising again up to 2027. The older age groups, from which part-time undergraduates are mainly drawn, will, on the other hand, experience modest growth over the same time period. The submission also analyses prospective changes in the population of the individual regions of England and their implications for entry to higher education. 3. The second part of the submission assesses the differential impact of these demographic changes on different student markets. It considers the relative importance of these markets to universities in terms of the share of total business that they represent. It then looks at the possible responses by universities that face the prospect of significant changes in demand. The submission examines the barriers that are likely to limit universities’ ability to respond in a proactive and flexible way. It then discusses what policy makers can do to assist universities respond successfully, and finally what universities need to do to help policy makers in this process.

3


Part 1: Demographic data 4. There are essentially four population groups within the demographic data which significantly affect the projection of participation in higher education in England: •

The young adult population of England, which is the major source of enrolment onto full-time undergraduate courses at English institutions.

The older population of England under the age of 60, which, especially within the age ranges 20-29 and 30-39, constitutes the major component of the part-time undergraduate population.

The young adult population of the other countries of the UK, who currently contribute 3.7 per cent of all students in higher education institutions in England.

The young adult population of other EU countries, who currently contribute 4.6 per cent of all students in institutions in England.

5. While enrolments from countries outside the EU are extremely significant especially at postgraduate level it is not demographic issues which influence the enrolment of students from countries outside the EU, but other factors, including especially the reputation of higher education in the UK. 6. It is not the intention in this submission to reproduce the earlier work published by Universities UK on the demographic projections as they relate to higher education for the UK ii as a whole and its four constituent countries . The two reports should be read together. However, in the context of this submission, we consider that it will be helpful to produce some more detailed demographic projections for England, covering the period up to 2027. 7. This submission will therefore extend the earlier demographic work in the following three ways. Basis of projections 8. In the earlier demographic report published by Universities UK, attention was drawn to the significantly different UK population projections published following the issuing of 2006based estimates by the ONS, as compared with those which were based on the 2004 estimates. In our previously published work we noted that: the 2006-based set of projections posits a much greater level of net inward migration year by year over the period in question than the 2004-based projections. Broadly, the 2006-based projections assume a steady state net inward migration rate of 190,000 persons, compared with 145,000 in the 2004-based principal projection. (It should be noted in passing that the

4


net inward migration rate also has an effect on the assumed fertility rate, so that any error in this projection is potentially multiplied.) 9. The sensitivity of the migration estimates has been highlighted both by the ONS and also by the Treasury Select Committee: there is a general understanding that the basis for estimating migration rates needs to be improved, and ONS has an active programme in place to generate such improvements. 10. In view of this sensitivity and the concerns that have been expressed about national population estimates, in this submission we present demographic data using both the 2004iii

based and 2006-based population projections . These uncertainties mean that higher education institutions may be reluctant to plan too firmly on the basis of current projections. Presentation of data 11. Our previous work was designed to show the changes that higher education institutions might expect to see over a twenty year period, and our projections were therefore similarly focused on the end of that period. We did, however, draw attention to the fact that the populations of 18-20 year olds both in the UK and in England were projected to reach a low point towards the end of the second decade of the century. In order to clarify the overall picture, in this current report data will be presented for 2006 and 2027 and also for three intermediate years, 2010, 2015 and 2019. Regional projections 12. Also, in the light of information recently provided by ONS, we have been able to provide some tentative projections of relevant population trends in the individual English regions.

The significance of demography in projecting higher education student numbers 13. By definition, the core of this report is concerned with demography. Before proceeding with the analysis, we should note that it is not suggested that demography alone determines demand for higher education. Later in this report, we shall note some other contributory factors, as we have also done in our earlier published work about the future size and shape of the higher education sector. 14. Demography is however a major driver, as has long been recognised. The Dearing report of 1997 projected forward the demand for higher education over a twenty year period using demographic projections, which led to the following chartiv:

5


Chart 1: Dearing chart, projecting student population to 2017

Source: Dearing report, chart 17.1

15. It is notable that this chart projects a steady increase in the numbers of full-time undergraduates in the period up to 2010, followed by a period of decline. 16. This projection may be tested against reality for at least half of the period it covers. An analysis of the change in population of the UK, compared with the change in applicant numbers through UCAS shows the following figures: Table 1: Actual percentage change in UK population and full-time undergraduate applicants, 1996 – 2005 Percentage change, 1996 - 2005

Age 18 years 18-20 years aggregate and at a later age: 30-39 years aggregate

UK population 22% 21%

UK applicants through UCAS 24% 25%

0%

0%

17. These figures support the Dearing projections, and also support the use of demographic trend projections in order to project forward the demand for higher education – while, of course, taking into account other changes, in policy, environment, and aspirations, which also contribute to change over time.

6


Population trends 18. The following paragraphs look at the different demographic projections that will affect enrolments into higher education institutions. The overall population of England 19. The charts below show the projected population of England in the age ranges relevant to entry into higher education. Projected population of England, ages 18 to 59 (thousands): Chart 2: 2006-based projections

Chart 3: 2004-based projections

10,000

10,000

2006

8,000

2010

6,000

2006

8,000

2010

6,000

2015

4,000

2019

2,000

2027

0

2015 4,000

2019

2,000

2027

0 18-21 22-25 26-29 30-39 40-49 50-59

18-21 22-25

26-29

30-39

40-49

50-59

Source: ONS/GAD

20. The overall picture presented here is indicative of the differences between the 2006-based and 2004-based projections. 21. Under the 2006-based projections, it can be seen that: •

The 18-21 year old population is projected to decline between 2010 and 2019, and then to recover, by 2027, to roughly the same level as in 2006.

The population aged 22-25 will increase and then subside to the same level as in 2006.

The population aged 26-29 will increase until 2019 and then subside, while remaining above the 2006 level.

The 30-39 age population will initially decline but will then increase substantially until 2027.

The older age ranges will either remain stable or will increase.

7


22. Under the 2004-based projections: •

The 18-21 year old population will decline throughout the next twenty years.

•

Only the 30-39 and 50-59 year old populations will see an increase, and this will be more modest than under the 2006-based projections.

The young population of England 23. The projected 18 year old population of England is shown in the following chart: Projected 18 year old population of England, 2006-2027 (thousands): Chart 4: 2006-based projections

Chart 5: 2004-based projections

800

800

600

600

400

400

200

200

0

0

2006

2010

2015

2019

2027

2006 2010 2015 2019 2027

Source: ONS/GAD

24. A similar analysis of the ages 18 to 20 is given in the following charts:

Projected 18-20 year old population of England, 2006- 2027 (thousands): Chart 6: 2006-based projections

Chart 7: 2004-based projections

2500

2500 2000 1500 1000 500 0

2000 1500 1000 500 0

2006 2010

2015 2019 2027

2006

2010

2015

2019

2027

Source: ONS/GAD

25. It is clear from these charts that the latest 2006-based estimates project approximately 100,000 additional people aged 18 in the year 2027 than the earlier set of projections. This difference alone is of major importance to universities in terms of their strategic planning.

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Differential change in the English regions 26. We have sought information about the prospective changes in the population of the individual regions of England, having regard to the normal age of entry into higher education. 27. The ONS has provided us with some projected population data at individual year of age, with v

several caveats, which are reproduced in the footnote . The data has been made available from both the 2004-based projections and, more recently, the 2006-based projections. We feel that it is important to provide both sets of projections here. 28. In view of the limitations of the data, we have aggregated the data at a level of three years of age (18-20), in order to show, in broad terms, the projected populations of the English regions within the age range 18 to 20, over the period under review. 29. We show this analysis in the following two charts: Chart 8: Projected population of English regions aged 18 to 20 (thousands), 2006 to 2027 with intermediate years – 2004-based projection:

350 300 2006

250

2010

200

2015

150

2019

100

2027

50

W es t

So ut h

Ea st So ut h

Lo nd on

Ea st

Ea st M id la nd W s es tM id la nd s

H um be r

Th e

W es t

Yo rk

sh ire

an d

N or th

N or th

Ea st

0

Source: ONS Sub-national projections Unit

9


Chart 9: Projected population of English regions aged 18 to 20 (thousands), 2006 to 2027 with intermediate years – 2006-based projection:

350 300 2006

250

2010

200

2015

150

2019

100

2027

50 W es t

Ea st

So ut h

So ut h

Lo nd on

Ea st

M id la nd W s es tM id la nd s

Ea st

H um be r

W es t

Th e

Yo rk

sh i re

an d

N or th

N or th

Ea st

0

30.While recognising the limitations of the data, it is fairly clear from these charts that the young population of the most northerly and westerly regions is projected to decline more steeply than the regions in the south and east of England. It is only the London, East and South-East regions that show an upturn towards the end of this period, bringing their young population back towards the 2006 position. 31. The 2006-based projections are generally more positive than the 2004-based figures, although the differential pattern by region is the same. 32. Clearly, if these demographic projections were borne out in practice, the impact on some universities that recruit mainly locally would be significant.

The young population of the other UK countries 33. Another factor of importance to English institutions is the cross border flow of students from the other UK countries (and, of course, the opposite flow of English students to universities in the other UK countries). 34. Traditionally, England has been a net exporter of students to the other UK countries, as would be expected given its relative size. However, it received over 70,000 students from the other countries of the UK in 2006/07, as detailed in the following table:

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Table 2: Students of English higher education institutions from the other UK countries, by level, 2006/07

Region of domicile Wales Scotland Northern Ireland UK students from outside England All students of English higher education institutions Percentage UK students from outside England

Postgraduate research 1,110 1,140 315

Postgraduate taught 4,670 3,900 2,210

First degree 20,885 12,145 9,615

Other undergraduate 5,795 8,915 2,595

Total 32,460 26,095 14,735

2,565

10,780

42,640

17,305

73,295

98,370

364,060

1,061,550

433,215

1,957,190

2.6%

3.0%

4.0%

4.0%

3.7%

Source: HESA

35. Our previously published work shows that there is a greater projected decline in the young populations of Scotland, Wales and Northern Ireland than in England over the next twenty years, and therefore it is possible that this inflow might decline. The decline might, of course, be exacerbated by: •

Different and changing fee regimes in the countries outside England .

•

Marketing strategies among the institutions in Scotland, Wales and Northern Ireland

vi

that aimed to attract more students domiciled in England.

The young population of the EU 36. The following chart shows the projected change in the 18-20 year old population of other EU countries: Chart 10: Population of other EU countries aged 18, 19 and 20, 2006 to 2027 with intermediate years: 7,000,000 6,000,000 5,000,000

18

4,000,000

19

3,000,000

20

2,000,000 1,000,000 0 2006

2010

2015

2019

2027

Source: Eurostat

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37. It is noticeable that these Eurostat projections of the population of EU countries by individual year of age closely resemble the 2004-based projections for the young adult population of England, in that they show a general decline in the age group across the 20 year period, with no immediate upturn at the end of that period. 38. Of course, the projections for individual countries vary, and the individual country populations are important in terms of enrolment in higher education in England. Appendix 1 shows the current level of enrolments from different EU countries, while Appendix 2 shows the projected population changes among young people within individual EU countries.

Projected student populations 39. In the light of the demographic factors described above, we set out in the following paragraphs our tentative projections of student numbers in higher education institutions in England over the next twenty years, including some intermediate years. 40. Since we do not want to invest these projections with an unrealistic impression of precision, we have rounded most figures to the nearest hundred, and overall totals to the nearest thousand. 41. It cannot be emphasised too strongly that the projected figures in the following tables are not intended to be precise, and that there are several steps of estimation involved. We believe the projections to be broadly indicative of the trends which we shall see over the next twenty years on the basis of current demographic projections, but recognise that many factors might come into play to change the outcome. 42. In the following tables: •

We have projected forward the enrolments in full-time and part-time undergraduates, having regard to the projected changes in the population as a whole.

We have not made any statistical assumptions about changes in the cross border flows of UK students, although it is reasonable to assume that there will be some changes.

We have followed the practice of our earlier work in not making any projection of change in relation to home postgraduate research students: we have not found a methodology for doing this.

The projection of postgraduate taught students is based on the growth rate of undergraduate students, and assumes a continuing increase in the conversion rate between undergraduate and postgraduate study. Universities UK is currently preparing a report on the subject of taught postgraduate students, in order to identify trends. 12


Table 3: Tentative projections of student enrolments, using 2006-based population projections:

Full-time undergraduate UK young UK older Home subtotal of which other UK countries

2006

2010

2015

2019

2027

Projected percentage change, 2006 to 2027

640,500 225,000 865,600

649,000 228,000 877,100

611,100 238,700 849,800

586,400 235,000 821,400

656,200 239,100 893,800

2.5% 6.3% 3.3%

34,300

33,500

32,100

30,700

32,200

-6.1%

38,400 72,800

36,000 73,200

35,500 73,700

34,800 74,100

35,100 75,800

-8.6% 4.1%

976,800

986,300

958,900

930,300

1,004,700

2.9%

164,000 309,600

169,000 317,400

172,700 324,600

173,400 326,400

175,100 329,500

6.8% 6.4%

473,600

486,400

497,300

499,800

504,600

6.5%

Full-time postgraduate taught (PGT) Home EU Other international Sub-total full-time PGT

71,100 17,200 57,500 145,800

74,200 16,600 57,800 148,600

72,000 16,900 58,100 146,900

71,100 17,000 58,500 146,700

75,500 16,400 59,800 151,700

6.2% -4.7% 4.0% 4.0%

Part-time postgraduate taught Home EU Other international Sub-total part-time PGT

174,400 7,500 12,900 194,700

175,000 7,500 12,900 195,400

176,000 7,500 13,000 196,500

177,000 7,600 13,100 197,700

178,300 7,600 13,400 199,300

2.2% 1.3% 3.9% 2.4%

Full-time postgraduate research (PGR) Home EU Other international Sub-total full-time PGR

25,800 7,300 17,900 51,000

25,800 7,300 18,000 51,100

25,800 7,300 18,100 51,200

25,800 7,300 18,200 51,300

25,800 7,300 18,600 51,700

0.0% 0.0% 3.9% 1.4%

Part-time PGR Home EU Other international Sub-total part-time PGR

17,600 2,200 3,400 23,200

17,600 2,200 3,400 23,200

17,600 2,200 3,500 23,200

17,600 2,200 3,500 23,300

17,600 2,200 3,600 23,300

0.0% 0.0% 5.9% 0.4%

1,865,100

1,891,000

1,874,000

1,849,100

1,935,300

3.8%

EU Non-EU Sub-total full-time undergraduates Part-time undergraduate Degree Non-degree Sub-total part-time undergraduates

All students

13


Table 4: Tentative projections of student enrolments, using 2004-based population projection

Full-time undergraduate UK young UK older Home subtotal

2006

2010

2015

2019

2027

640,500 225,000 865,600

645,600 228,100 873,700

605,500 226,400 831,800

562,500 220,600 783,000

588,800 212,700 801,500

Projected percentage change, 2006 to 2027

34,300

34,300

34,300

34,300

34,300

38,400 72,800

36,000 73,200

35,500 73,700

34,800 74,100

35,100 75,800

-8.1% -5.5% -7.4% 0.0% -8.6% 4.1%

976,800

983,000

941,000

891,900

912,400

-6.6%

164,000 309,600

166800 314000

168500 317800

168100 317700

166,800 315,200

1.7% 1.8%

473,600

480800

486300

485800

482,000

1.8%

Full-time postgraduate taught (PGT) Home EU Other international Sub-total full-time PGT

71,100 17,200 57,500 145,800

73800 16600 57800 148,200

71300 16900 58100 146,300

68200 17000 58500 143,800

73600 16400 59800 149,800

3.5% -4.7% 4.0% 2.7%

Part-time PGT Home EU Other international Sub-total part-time PGT

174,400 7,500 12,900 194,700

175000 7500 12900 195,400

176000 7500 13000 196,500

177000 7600 13100 197,700

178300 7600 13400 199,300

2.3% 1.6% 4.0% 2.4%

Full-time postgraduate research (PGR) Home EU Other international Sub-total full-time PGR

25,800 7,300 17,900 51,000

25,800 7,300 18000 51,100

25,800 7,300 18100 51,200

25,800 7,300 18200 51,300

25,800 7,300 18600 51,700

0.0% 0.0% 4.0% 1.4%

Part-time PGR Home EU Other international Sub-total part-time PGR

17,600 2,200 3,400 23,200

17,600 2,200 3,400 23,200

17,600 2,200 3,500 23,200

17,600 2,200 3,500 23,300

17,600 2,200 3,600 23,300

0.0% 0.0% 4.0% 0.6%

1,865,000

1,882,000

1,844,000

1,794,000

1,819,000

-2.5%

of which other UK countries

EU Non-EU Sub-total full-time undergraduates Part-time undergraduate Degree Non-degree Sub-total part-time undergraduates

All students

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Factors that may affect the overall projections 43. Several factors may affect the purely demographic-based projections. Some of these have been analysed by the Higher Education Policy Institute (HEPI) in its report Demand for vii higher education to 2020 and beyond . Change in the articulation between Level 3 and Level 4 qualifications 44. HEPI’s report notes that ‘the proportion of young people taking GCE A levels is the major factor in influencing the numbers that go on to higher education’. The report went on to observe that, since 1994: the proportion of the 17-year-old population achieving two A levels increased steadily, from 24.6 percent in 1994 to 34.2 percent in 2002, when the increase stalled. Although the 2006 level was above that of the previous year, it was barely different from 2002. There is no evidence here that achievement at the key point in the supply chain is improving in a way that suggests that participation will increase in the future. 45. It is now possible to update the HEPI report, and our own previously published report, by including the percentage of students achieving two or more A levels in 2007, as shown in the viii

following chart . From this it can be seen that the percentage achieving two or more A levels in 2007 was in fact slightly lower than in 2006, so confirming the position that there is no upward trend in this factor. Chart 11: Percentage of the English 17 year old population achieving 2 or more A levels, 1994-2007

40 35 30 25 20 15 10 5

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

0

Source, ONS/DCFS/DIUS SFR 02/2008

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46. Plainly, as is recognised by Universities UK and also by HEPI in its report, A-level entry (by GCE and VCE A levels) is not the only route into higher education, but individuals obtaining Level 3 qualifications other than A-levels show a much lower propensity to enter higher education than those with A-levels. Social class issues 47. The HEPI report also provides an interesting analysis of changes in the social class composition of eighteen year olds over a period of fifteen years. It uses the social class of the father at birth of the full-time undergraduate entrants as a proxy for prior attainment. HEPI notes that: Prior (school) educational attainment is the dominant determinant of participation in higher education, and because of differential achievement at school according to social class, the social class of the father at birth is a useful proxy for this. 48. The following chart, reproduced from the HEPI report, illustrates the relationship between the 18 year old population and the social class of the father at birth. Chart 12: 18 year olds by father’s social class at birth

25000 20000

I

15000

II

10000

IIIN

5000

IIIM

0

IV

20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19

Population (1000)

18 year olds by father's social class at birth 2005 to 2020

V

Years

Source: HEPI

49. It is clear from this chart that the proportion of the population declared at birth as having a father in the IIIM category (skilled occupations – manual) has declined over time, while the proportions in class II (managerial and technical occupations) has increased. HEPI argues that this shift in the social class of the fathers of the eighteen year old population has led to and will further lead, as this trend continues over the next decade, to an increase in participation rates in higher education.

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50. The specific calculations in the HEPI report are not followed here, partly because they were ix

only based on the 2004-based population projections , but also because the basis for calculating the enrolments of part-time students was incorrect. 51. It is, of course, not axiomatic that, on moving from one socio-economic grouping into another, an individual will follow the practice of others in that socio-economic group. However, the basic assumption within the HEPI report – that there is a shift into the higher social classes, and that this will lead into an increase in the higher education student population – is persuasive; and there is evidence to support the view that an increasing proportion of the young population is seeking to enter higher education, and is actually succeeding in doing so. 52. Work which Universities UK has published in order to monitor the effects of the introduction of variable fees in England provides evidence that: the number of applicants per thousand of the 17 year old population has increased over the x last five years in all of the constituent countries of the United Kingdom . The increase has been most marked in England, where it has increased by 19 per cent from 400 to 475 applicants per thousand of the 17 year old population. 53. It is possible that this effect may relate to a change in aspirations, perhaps arising from social mobility. However, this is essentially speculative, and it will be valuable to track the progress of the new DIUS indicator - Full-time Young Participation by Socio-Economic Class (FYPSEC) – in order to identify whether there has in fact been a real change over time. We note that this indicator now has the status of a component part of a Public Sector Agreement (PSA) target. Change in the ethnic mix of the population 54. In our main projections, we have had regard to the ethnic mix of the population, and as our earlier work made clear, the projected change in the ethnic mix of the population was included in the projections. It is assumed that there will be an increase in the proportion of the population from some of the ethnic groups that provide a disproportionately high percentage of young people into higher education. The overall effect is very small, but plainly any change in the ethnic mix of the young population might affect this assumption, either positively or negatively.

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Part 2: The response of universities to variations in demand arising from demographic changes 55. This section first analyses the impact of the demographic change by the main student markets and the relative importance of these student markets to universities in terms of the share of total business that they represent. It then looks at the possible responses by universities that face the prospect of a significant fall in demand and hence in income. 56. It must be emphasised at the outset that the projected demographic changes will impact on each university in a unique fashion depending on: •

The location of the university and whether it mainly recruits locally or nationally.

The relative importance of each student market to the overall income of the university, including income from activities other than teaching students, in particular research and innovation.

The balance between different age groups in the intakes of all its programmes.

The balance between home, EU and international students.

The university’s position in the market: does it select students from a high level of qualified applicants or does it recruit students?

57. The existence of these variations in the starting position of individual universities also serves to emphasise the importance for them of not treating demographic change in isolation from other changes to the environment in which they operate. These other changes may be of greater significance than demographic change for an individual university or significantly constrain its room to respond to the impact of demographic trends and this is considered further in the next section of this paper.

The impact of demographic change on different student markets Home and EU full-time undergraduates 58. In 2006/07 Home and EU undergraduates at all English higher education institutions represented 48.5 per cent of all enrolments and 63 per cent on a full-time equivalent basis. International full-time undergraduate students from outside the EU represented a further 3.9 per cent of the total student population: these are considered separately below together with the rest of the international student market. For the majority of universities, full-time undergraduates represented over 50 per cent of the total enrolments in 2006/07.

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59. 13 below shows the distribution of institutions by full-time undergraduate student numbers as a percentage of total student numbers. Chart 13: Distribution of English higher education institutions by full-time undergraduate students as a percentage of total student numbers, 2006/07

Source HESA

60. This shows that close to 70 per cent of all institutions in 2006/07 had more than 50 per cent of full-time undergraduate students and over 10 per cent had more than 70 per cent of fulltime undergraduates within their total student population. Those with less than 30 per cent full-time undergraduate were predominantly part-time or postgraduate providers or in a small number of cases had substantial numbers of further education students. For many universities therefore the income brought in by full-time undergraduates through grants and fees is not only their largest single source of income, but also their most assured income, subject only to a failure to recruit. With the demographic increase in the number of 18-20 year olds since at least 2000, that risk has been small despite the absence of any significant increase in the participation rate of young people in undergraduate higher education. (The Department’s measure of young participation (HEIPR20) has moved from 31.3 per cent to 31.6 per cent in the last seven years.) 61. The demographic analysis indicates, however, that the biggest impact of population changes over the next twenty years will be from 2010 to reduce demand in the home and EU full-time undergraduate market at least until 2019. This reflects the high proportion (around three quarters) of entrants to full-time undergraduate programmes who are aged 18-20 and it is the numbers in this age group which are expected to decline most sharply from 2010 to 2019. However as noted in part 1 of the submission, the population projections for England are themselves more uncertain than has been the case in the past because of uncertainties about the rate of net inward migration. We have therefore presented projections of full-time undergraduate numbers derived from the two most recent age-related population projections 19


published by ONS, based respectively on 2004 and 2006 estimates of the key variables of fertility and migration rates. 62. Both demographic projections show a reduction in full-time undergraduate numbers by 2019 varying from around 45,000 on the 2006 based population projections to 85,000 on the 2004 based population projections. This difference is significant in the implications for the higher education sector as a whole. However, the projections show that this decline is concentrated on the young entrants (under the age of 21) and that the number entering aged 21 and over remain broadly constant across the period in line with the population projections. 63. On the more optimistic of the two projections a relatively modest increase in the young participation rate of around 4 per cent would be sufficient to offset the demographic decline in their total numbers. However, on the more pessimistic assumption a much greater increase in participation (of nearly 8 per cent) would be required. As noted above, there is currently no evidence of any significant increase in participation despite changes in the social mix of the population and the continuing financial support for efforts to motivate an increased proportion of qualified young people from under-represented groups to enter higher education. Part-time undergraduates 64. Part-time undergraduates represented about 25 per cent of total student numbers in 2006/07, or around 12 per cent on a full-time equivalent basis. They formed the second largest group of students. The part-time undergraduate market is segmented with older people who have deferred their entry to higher education but cannot afford to study full-time undertaking degree and other programmes; people in employment undertaking vocational or professional qualifications related to their employment; and a heterogeneous group of students following a wide range of non-vocational programmes, including traditional adult education. The main common feature of all these different part-time undergraduate markets is that people tend to enter their courses after the age of 21, most commonly in their thirties or forties. On the currently projected pattern of demographic change over the next twenty years, the numbers of part-time undergraduates is expected to rise modestly even under the more pessimistic of the two population projections. This increase is before any rise in demand from individuals, whether or not supported by their employers, for higher level qualifications linked to the increased demand from employers for higher level skills xi

envisaged in the Leitch report . 65. Unlike the full-time undergraduate market, only a minority of institutions have significant parttime undergraduate provision. In 2006/07, 37 institutions out of 132 had more than 4,000 part-time undergraduates and accounted for close to 80 per cent of part-time undergraduate enrolments. Two of these are specialist part-time providers, the Open University and Birkbeck College, University of London. In some other institutions with significant part-time undergraduate numbers, their part-time undergraduate programmes are largely delivered through academic partnerships usually with one or more further education colleges, often under franchising agreements. To provide the kind of flexible delivery in terms of time, place 20


and manner and to be financially sustainable part-time provision needs to be offered on a relatively large scale. 66. For many other institutions, there is modest in-filling on full-time undergraduate programmes by part-time students (some of whom are full-time students temporarily registered as part time while repeating some elements of their undergraduate programme in order to progress). However, this is not the main part-time undergraduate student market and it is not a significant source of income for the institutions concerned. Furthermore, for those institutions that are serious players in the part-time undergraduate market, their income from this source is dependent to a large extent on payments by individuals or their employers. It is less assured than the income from full-time undergraduates which is largely derived from public funds. Full-time postgraduates 67. In 2006/07 full-time postgraduate students constituted 10.5 per cent of total student numbers. Around 25 per cent of these students were studying for research qualifications and the remainder were on taught – mainly taught masters – programmes. Over 50 per cent of all full-time postgraduate students were from outside the UK and 38 per cent were from outside the EU. This is true both for full-time taught and research postgraduate students. 68. The demographic-based projections show some decline in demand for full-time postgraduate taught programmes from home and EU students, reflecting the high proportion of those entering full-time postgraduate programmes immediately after graduation. The projected fall is however moderated by two factors compared to the decline in the number of full-time undergraduates. First, the proportion of graduates entering full-time postgraduate taught programmes has been rising. Second, the projected demand reflects the high proportion of full-time postgraduate students who are international students from outside the UK. The projection of international student demand (other than from the EU) is not linked directly to demography but to estimates prepared by the British Council. This is considered further below. 69. Although full-time postgraduate taught students are only a modest source of total income for most universities, the high proportion of international students and the ability to charge premium fees for many of the programmes for home as well as international students, taken together, mean that these taught postgraduate programmes can generate real net income for institutions. This can be of particular importance to institutions when additional funded full-time undergraduate numbers are not available 70. Projected demand from postgraduate research students is assumed to be independent of demography, since it is largely driven by the availability of research studentships linked to research grants and contracts funded by the main research funders, in particular the UK research councils. For those universities with high levels of research activity, the ability to continue to attract postgraduate research students in sufficient numbers is a major factor in sustaining the research activity. Moreover the continued ability of universities to attract 21


postgraduate research students of sufficient calibre is vital to the future research base of the UK, as reflected in the ten year research investment strategy drawn up by the Government

Part-time postgraduates 71. In 2006/07 part-time postgraduates – both those on postgraduate taught programmes and those on postgraduate research programmes (excluding those writing up theses or dissertations) - were around 11.7 per cent of total enrolments. Around 12 per cent of these students were from outside the UK. Because there is a wide age range of students on parttime postgraduate programmes it seems likely that this market will be the least affected by demographic change and the demographic based projections show a modest increase of around 2.4 per cent across the period. 72. Demand for part-time postgraduate taught programmes is driven in part by the demand for the highest level skills in the economy both from individuals wishing to progress in their chosen career and from employers needing individuals with relevant skills to compete in international and national markets or to enable the delivery of services of the highest quality. However, since tuition fees for part-time taught postgraduate programmes are often high, the availability of financial support from employers is a key factor in demand. This availability of employer support is reflected in the most popular areas of part-time postgraduate study. 73. In 2006/07 around 70 per cent of all part-time taught postgraduate enrolments were in four subject areas – nursing and other professions allied to medicine, social studies, education and business and management. Apart from the last of these a good deal of the demand in these subject areas is from individuals employed in the public sector – the NHS, schools and local authorities where there has been a tradition of supporting professional staff to continue their professional development through part-time postgraduate study. The international student market 74. Students from other EU countries and from outside the EU now make up a significant proportion of total student numbers. In 2006/07 there were around 89,000 students in English higher education institutions from other countries of the EU, of which over half were studying at undergraduate level. There were in addition over 200,000 students from countries outside the EU studying at English institutions, of which 56 per cent were studying at postgraduate level. Together students from the EU and from outside the EU represented nearly 15 per cent of all students in English institutions in 2006/07. 75. In the projections of demand presented in Tables 3 and 4 we have assumed that EU enrolments at undergraduate level would be affected by the projected similar pattern of change in the populations of the relevant age groups for entry to higher education in most countries of the EU over the next twenty years. These projected population changes seem likely to increase competition between European institutions within the context of the Bologna process to harmonise programme structures. 22


76. The demand from students from outside the EU is related to a range of factors and not just to demography. These include the pace of economic growth in different countries, the development of their own higher education systems and global competition for international xii students. Our projections are based on the analysis undertaken by the British Council in 2004 which suggested that the number of international students from outside the EU in UK higher education institutions would continue to grow modestly up to 2020. The British Council is now undertaking a series of in-depth studies of the likely pattern of demand from individual countries which are important sources of students for the UK, and recently xiii published the first of these studies on China . This suggests that there are a complex series of factors at work which impact on demand from Chinese students, with economic development increasing demand for higher education at a time of demographic decline in the young population of China. 77. Table 5 below summarises the impact of demographic change on demand in the main student markets Table 5: The impact of demographic change on student markets Student market Full-time undergraduate (under 21)

Share (1) of total student numbers (percentage) 38.8

Impact of demographic change

Full-time undergraduate (over 21) Part-time undergraduate

13.6

Potentially significant reduction in demand, depending on net inward migration rate, attainment by 18 year olds, and the impact of the changing social mix of the population on participation Broadly neutral

25.4

Some modest increase in demand

Full-time postgraduate (taught)

7.8

Full-time postgraduate (research) Part-time postgraduate (taught and research)

2.7

Slight reduction in home and EU demand Assumed to be neutral

11.7

Some modest increase in demand from home and EU students

Note (1) including overseas students from the EU and elsewhere.

The likely response of universities to the projected pattern of demographic change 78. Given the high importance of the home and EU full-time undergraduates for most universities, in terms of the proportion of total income they generate, universities will continue to assess the risks to that income. The prospective demographic decline in the population of 18-20 year olds is potentially a significant risk to undergraduate recruitment for some universities, but each university will make its own assessment based on its knowledge

23


of the profile of the students it recruits – where do they come from, what is their age profile and who are their main competitors for such students? 79. As the prospect of demographic change on demand for full-time undergraduate study has been recognised for some time, universities will have been assessing the risks for them from demographic change and building their assessment of the risk and how it can best be managed into their strategic planning. 80. Those universities which conclude that the impact on recruitment may be serious will explore a number of approaches to managing the risk to their income. These will include: •

Expansion of those activities where their market position is strongest. This could include areas in their undergraduate course profile where demand is strong or they have competitive edge which might be expanded at the expense of weaker areas. It might also include expansion in other markets where they have existing strengths such as part-time undergraduate teaching, international students or in the expansion of knowledge transfer or research activities. This response may be best expressed as the exploitation of niche markets.

Engagement with pupils in schools from an increasingly early age to increase the number who see higher education as an option for them. Universities have already recognised that such early engagement is essential if they are to have a real impact on widening participation, especially in low participation neighbourhoods. The prospect of a decline in the number of young people and increased competition will reinforce the motivation of universities to engage with school pupils to encourage them to stay in education after the age of 16 and see higher education as an option for them.

Further developments of partnerships with further education colleges and other nontraditional providers through franchise or other partnership arrangements to maximise local recruitment onto undergraduate programmes, particularly in areas where participation in higher education has been low. This approach can not only help to deliver full-time programmes in areas where access to the university itself may be difficult, but also provide the kind of flexible pattern of part-time study which might encourage qualified older people to consider entering higher education for the first time.

Increased collaboration between universities in those subject areas such as languages and physical sciences where undergraduate recruitment is already under pressure and likely to be under further pressure from the decline in the number of 18-20 year olds. Such collaboration might include joint marketing to potential students, flexibility of study and access to facilities. Existing examples include collaboration between six universities in the South East in physics covering both teaching and research and pilot schemes between the Open University and

24


traditional universities in the development of collaborative undergraduate programmes in subjects of low demand. •

The identification and exploitation of new markets. Universities have in the past shown themselves adept at developing new markets either by developing new programmes or tailoring existing programmes to meet the needs of new student groups. However, there is no immediately obvious equivalent untapped undergraduate market to the initial training of nurses and midwives which provided a new source of students and income from the end of the 1980s at a time when there was a similar demographic decline in the numbers of 18 to 20 year olds. Many of the new opportunities seem likely to be skills related and best delivered on a part-time basis and universities may face significant competition in these markets from further education colleges or even private providers. Such potential competition may provide an additional incentive to universities for the further development of franchise and other partnership arrangements. One market that would appear to be open to wider exploitation is part-time higher education for those aged over 60 who no longer work full-time or have retired. Their numbers will increase substantially over the next twenty years as the ‘baby boomer’ generation reaches retirement and life expectancy continues to increase. The principal issue for universities is the funding for programmes aimed at the needs of this age group especially where programmes are non-credit bearing or the individuals already hold higher education qualifications.

Increased employer engagement. There is already significant engagement between universities and public sector employers in the delivery of initial education and training and continuing professional development (CPD) in medicine and subjects allied to medicine, in education and in social work. Such activities form a substantial proportion of the total business of some universities. However, private sector employers spend only a very limited proportion of their training budgets in higher education institutions. Some universities are seeking to develop strategies for a much increased engagement with business across all their activities – teaching and learning, knowledge transfer and research – and the Higher Education Funding Council for England (HEFCE) is providing funds to support these developments. The prospective decline in the numbers of traditional young entrants to higher education may provide added incentive to such developments. It is important, however, to recognise that the pursuit of increased engagement with private sector employers may incur higher risks than delivering traditional full-time undergraduate programmes. For example, there is little hard evidence of the type of incentives that might persuade private sector employers to spend a higher proportion of their training budgets with publicly funded higher and further education providers. This potential increased risk is reflected in the evaluative approach to the support of new approaches to employer engagement adopted by HEFCE.

25


81. None of these strategies can offer the degree of security of income offered by full-time undergraduates where the vast majority of the funding comes from taxpayers. It clearly makes sense therefore for universities to invest in seeking to increase participation in fulltime undergraduate education to offset the impact of the prospective reduction in the number of 18-20 year olds, but the Government’s policies on school education will continue to be the major factor, apart from demography, affecting demand through their impact on the proportion of young people gaining level 3 qualifications. 82. The alternative markets which universities may seek to tap into tend with some exceptions to provide lower margins as well as being less secure than the full-time undergraduate market since they depend on funding other than public funding, primarily fees. This is especially the case where universities are competing with private providers with lower cost structures than they have. In this situation universities may go for high volumes of activity and this may put xiv quality at risk. This possibility is addressed in our second report on the future size and shape of the higher education sector. 83. More generally there is a range of challenges which universities face and will need to overcome if they are to respond successfully to demographic change. These are considered in the next section in order to provide the full context in which policymakers must make judgements about the most helpful response to the changing environment for universities.

Challenges 84. To respond effectively to the risks posed by the demographic changes over the next twenty years universities need above all to respond proactively and flexibly. There are a number of factors – some existing and some potential – that will limit universities’ ability to respond in a proactive and flexible way. These include: •

The costs of sustaining undergraduate teaching, especially the need keep the teaching infrastructure of buildings and equipment up to date are high relative to the income that they attract. Many universities have relied on continued growth in numbers to keep their teaching sustainable. Even with the enhanced levels of funding for full-time undergraduates now available with variable fees, unit costs will be rising faster as undergraduate numbers fall.

The financial calculations for part-time undergraduate study are quite different to full time study. The public support for fees and for student living costs is much lower than that available for full-time undergraduates which in turn means that the parttime undergraduate market is much more sensitive to the level of fees charged since individuals by and large have to pay them up front or seek financial support from their employer. Apart from those universities that are already significant players in the part-time undergraduate market, transferring from the full-time undergraduate market to the part-time undergraduate market may not be a financially viable option for many other universities. Yet many of the available new markets are likely to be

26


part-time if the enhanced skill levels within the working population are to be delivered. •

A high level of public regulation limits the autonomy of universities and their ability to act flexibly in the face of changing markets.

The successful management of risks by institutions will become more challenging in the face of threats to income from demographic change and increased competition. The level of financial surpluses currently being generated by institutions would be regarded by most businesses as insufficient to secure sustainability in the face of such risks. The level of surpluses is also below what HEFCE has suggested is necessary to provide the level of investment in infrastructure and new programmes and services for universities to compete effectively.

Although the scale and impact of increased competition in global and UK higher education markets from overseas universities, private providers gaining accreditation in the UK market, or even from further education colleges gaining foundation degree awarding powers has not been fully assessed, such competition could significantly impact upon universities’ ability to act flexibly in the face of demographic change.

The low level by international standards in the level of investment in technology based learning in higher education may prove to be a significant barrier to the ability of universities to compete in new or changing markets. Those entering higher education in the UK over the next few years are the first generation that has been brought up with digital technology and mobile phones. They will expect some elements of their programmes to be delivered virtually and available at times to suit them; and they will use their own networks to enhance the learning experience. Providing remote access to learning programmes through hand held devices also seems likely to be an increasing feature of global or borderless delivery of higher education programmes. The lack of sufficient investment in technologically based learning could make existing universities less attractive to home students and significantly limit universities’ ability to engage with the borderless market as part of their proactive flexible response to demographic change.

The demographic structure of the academic profession could produce staff recruitment difficulties for institutions as they seek to shift the emphasis of their activities. Around 15 per cent of academic staff in the UK is aged over 55 but, as a xv recent policy briefing published by Universities UK shows, there is likely to be increased global competition for academic staff.

The high reputation of UK higher education remains crucial to the ability of universities to compete effectively in the international market.

27


What should policymakers do to help universities to respond successfully? 85. For the purposes of this paper we identify “policymakers” as the relevant Government departments – DIUS itself, the Department for Children Schools and Families (DCSF) and the Department of Health (DoH) in particular - and their agencies and Non-Departmental Public Bodies (NDPBs), in particular HEFCE but also the NHS and the Training and Development Agency for Schools, which are all major funders of universities in England. 86. The key things which policy makers need to do are: •

To continue to support, publicly and within Government, the case for increased participation in higher education and the benefits in terms of social inclusion, economic performance and the wellbeing of society. It is recognised that this case will have to be made within an increasingly difficult public expenditure environment, with lower economic growth (or recession) compared to recent years limiting the total of public expenditure and, within the total, increased competition for public funds from pensions, health and social care to support an ageing population and from schools at a time when demand for full-time undergraduate education is declining for demographic reasons. Nevertheless higher education will continue to make direct and indirect contributions to the delivery of those services and to economic performance more widely which justify a continued high level of public investment in it.

To continue to develop policies for schools and colleges and the support of families that increase educational attainment at the age of 18 and widen the pool of those qualified to enter higher education. The implementation of the new diploma qualifications and of the requirement for young people to remain in education or training up to the age of 18 represent particularly important opportunities in this respect.

To clarify the objectives of public funding for higher education and the extent to which part-time higher education is seen to meet those objectives as well as full-time higher education, particularly at undergraduate level. This relates in particular to the value attached to participation and partial qualifications compared to confining the measure of success to the achievement of full qualifications. Given the benefits in terms of improved health and longer independence from participation in education by those aged over 60, it is important to have a public debate about the case for public funding of learning opportunities for this age group both at higher education level and other levels.

To keep regulation of the higher education system to the minimum required to provide proper financial accountability and assurance of quality of provision. 28


To develop a framework for teaching funding that does not inadvertently restrict the efforts of universities to increase their teaching income from sources other than public funds and to ensure that public funding methods recognise that one size does not fit all.

For HEFCE in particular to support proposals for structural change which emerge bottom-up from the higher education sector both through the application of strategic funding and by facilitating debate where that is required. In the first instance this is about facilitating effective collaboration rather than promoting rationalisation.

To facilitate the debate on the level of investment required within the UK to secure the full advantages of learning delivered on-line and through wireless devices. The actual investment required may come from the public or private sectors or the two working in partnership.

To ensure that all national policies support universities’ efforts to compete successfully in the global student market.

What can universities do to help policymakers? 87. Universities will need to continue to: •

Make the case for sustained public investment in higher education that supports the delivery of public goods, including improved economic performance and improved public services.

Maintain and enhance quality and manage performance effectively in the face of increased cost pressures and sustain the reputation of UK higher education globally.

Recruit and manage staff effectively in the face of the prospective retirement bulge so that the UK higher education continues to attract and retain staff of the highest calibre.

Develop their efforts to identify and exploit mutually beneficial opportunities for increased collaboration within the sector, with non-traditional providers and with potential investors in the learning infrastructure and further develop their ability to make the case for up-front public investment to secure those benefits.

Contribute fully to work with school children from the age of 11 or even earlier to get across the message that higher education is for all who can gain the required entry qualifications.

29


•

Alert policy makers to newly arising barriers and threats that constrain the ability of institutions to respond to the challenges thrown up by demographic and other significant changes to the external environment.

30


Appendices Appendix 1 Enrolments of students from other EU countries in English higher education institutions, by level, 2006/07

European Union countries excluding UK

Total

Higher degree (research)

Higher degree (taught)

Other postgraduate

First degree

Other undergraduate

89140

12820

23245

3475

40955

8650

Austria

1230

220

270

55

580

105

Belgium

2240

270

445

75

1305

140

Cyprus

8445

540

2035

110

5460

300

995

75

190

20

595

115

1335

200

380

85

565

110

Estonia

465

35

55

5

320

50

Finland

1395

165

210

45

880

90

France

10110

1090

2570

390

4610

1440

Germany

11345

2080

2665

360

4875

1360

Gibraltar

540

15

55

35

405

30

14020

2660

6175

335

4355

500

890

115

175

30

450

115

Czech Republic Denmark

Greece Hungary Republic of Ireland

8290

795

1915

875

3355

1355

Italy

5315

1600

1355

285

1565

510

810

30

135

5

555

80

1385

40

155

15

1075

105

695

75

130

15

440

35

Latvia Lithuania Luxembourg

640

165

290

20

145

20

The Netherlands

2430

405

835

135

865

195

Poland

5080

415

1070

115

2830

645

Portugal

2615

750

470

60

1150

185

Slovak Republic

805

45

85

15

560

95

Slovenia

250

55

80

10

85

20

Spain

4890

680

1020

280

2075

830

Sweden

2925

290

470

95

1855

215

Bulgaria

640

100

160

25

300

55

Romania

645

165

155

40

170

115

Malta

31


Appendix 2 Chart showing the projected populations of each EU country aged 18 to 20, 2006 to 2027 including intermediate years.

0

500000

1000000

1500000

2000000

2500000

Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary

2006 2010 2015

M alta Netherlands

2019 2027

A ustria P oland P o rtugal Ro mania Slo venia Slo vakia Finland Sweden

32


Appendix 3 Figures underlying the charts in the report Projected population of England, ages 18 to 59 (thousands) Chart 2: 2006-based projections Ages 18-21 22-25 26-29 30-39 40-49 50-59

2006 2,703 2,686 2,589 7,318 7,368 6,320

2010 2,785 2,974 2,917 6,909 7,721 6,266

2015 2,606 3,016 3,213 7,170 7,455 6,963

2019 2,462 2,857 3,228 7,852 6,934 7,418

2027 2,747 2,746 2,926 8,154 7,504 6,922

Chart 3: 2004-based projections

Ages 18-21 22-25 26-29 30-39 40-49 50-59

2006

2010

2015

2019

2027

2,695 2,638 2,581 7,303 7,379 6,330

2,748 2,866 2,780 6,852 7,729 6,272

2,595 2,900 3,014 6,903 7,431 6,971

2,460 2,764 3,036 7,401 6,878 7,416

2,527 2,654 2,766 7,631 7,145 6,872

Projected 18 year old population of England, 2006-2027 (thousands) Chart 4: 2006-based projections Ages 18

2006 676

2010 672

2015 630

2019 576

2027 684

Chart 5: 2004-based projections Ages

2006

2010

2015

2019

2027

18

675

670

633

578

613

Projected 18-20 year old population of England, 2006 – 2027 (thousands) Chart 6: 2006-based projections Ages

2006

2010

2015

2019

2027

18-20

2,016

2,072

1,923

1,806

2,066

Chart 7: 2004-based projections Ages 18-20

2006 2,013

2010 2,051

2015 1,920

2019 1,811

2027 1,874

33


Projected population of English regions aged 18 to 20 (thousands), 2006 to 2027 with intermediate years: Chart 8: 2004-based projection: Region North East North West Yorkshire and The Humber East Midlands West Midlands East London South East South West

2006 109 284 222 179 217 202 287 314 197

2010 109 287 228 187 220 209 280 327 204

2015 99 259 211 174 203 202 268 310 195

2019 90 241 197 164 191 193 255 296 185

2027 91 245 204 170 196 201 276 303 188

2006 113 288 229 182 219 203 276 309 198

2010 110 290 233 191 221 212 277 329 209

2015 99 259 215 177 203 204 259 309 198

2019 90 239 200 167 190 193 245 294 188

2027 101 270 229 191 216 223 293 333 211

Chart 9: 2006-based projection: Region North East North West Yorkshire and The Humber East Midlands West Midlands East London South East South West

The young population of the EU Chart 10: Population of other EU countries aged 18, 19 and 20, 2006 to 2027 with intermediate years: Ages 18 19 20

2006

2010

2015

2019

2027

5,611,838 5,677,039 5,734,867

5,520,126 5,661,581 5,627,985

5,037,095 5,058,097 5,152,532

4,987,841 4,959,162 4,985,300

4,873,740 4,907,118 4,940,183

34


Change in the articulation between Level 3 and Level 4 qualifications Chart 11: Percentage of English 17 year old population achieving 2 or more A levels, 19942007: 1994

24.6

1995

26.1

1996

26.8

1997

26.9

1998

30.0

1999

30.5

2000

31.5

2001

33.0

2002

34.2

2003

34.0

2004

34.4

2005

34.0

2006

34.4

2007

33.9

35


Notes i

This report is explicitly limited to higher education provision funded through higher education institutions: it excludes directly funded provision at higher education level in further education colleges: there is no reason to believe that demographic effects would impact differentially on further education colleges, although it should be noted that the proportion of directly funded higher education provision in further education colleges has been declining over recent years. (See, for example, Universities UK (2008) Patterns of higher education institutions in the UK, eighth report.) ii Universities UK (2008) The future size and shape of the higher education sector in the UK: demographic projections. iii An alternative approach might have been to use one or more of the variant projections based on the 2006 estimates: however, selecting one or more of these synthetic variants would have been arbitrary, and it was felt that to use the principal projections from the last two years was more robust, and also demonstrated the volatility of the figures. iv Dearing (2007) Report of the national committee of inquiry into higher education, chart 17.1 v ONS states that: ‘ONS do not normally publish projections data at a single year of age because this implies accuracy in the data that simply does not exist. The minimum age group that we generally publish is quinary, a level at which the projections are considered to be more robust. We strongly advise that single year of age data for local areas should be aggregated to at least five-year age groupings for use in further calculations, onwards circulation, or for presentation purposes. This information is being made available because ONS is obliged to release it under the Freedom of Information Act 2000. It should be considered purely as a calculation which has been used in an intermediate stage of the projection process and not necessarily able to be used except as part of a larger series of projections’. vi Our latest work on monitoring the impact of variable fees includes some discussion of this issue: Universities UK (2008) Variable tuition fees in England: assessing their impact on students and higher education institutions. vii HEPI (2007) viii The data underlying the chart can conveniently be accessed at http://www.dfes.gov.uk/rsgateway/DB/SFR/s000769/SFR02-2008-corrected.pdf ix Described as 2005-based projections in the HEPI report. Part-time enrolments were incorrectly calculated by estimating the change in the total population aged over 30, and then applying that figure to students aged over 30, who have a very different age profile. x Again, we must note that the figures for 2008 are slightly inflated because of the inclusion of nursing and midwifery applicants for the first time. xi HM Treasury (2006) Prosperity for all in the global economy – world class skills xii http://www.britishcouncil.org/eumd-information-research-vision-2020.htm xiii www.britishcouncil.org/forecasting_international_student_mobility_-_executive_summary.pdf xiv Universities UK (2008) The future size and shape of the higher education sector in the UK: threats and opportunities. xv Universities UK (2007) Talent wars: the international market for academic staff.

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Impact of demographic change  

Universities UK October 2008 Contribution to the DIUS State of the Nation Review

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