In last week’s Autumn Statement, the Chancellor of he Exchequer made a surprise announcement, that student number controls would be scrapped in 2015-16. While he was still answering questions in the House, I wrote a short blog piece on why this might not be completely good news.

Let me make absolutely clear – opinions expressed in this article (and in the previous one) are personal, and in no way reflect the opinions or decisions of Staffordshire University.

Since I wrote that piece, plenty of other commentators have provided their views, across Twitter, blogs and other more established news outlets. I’ve also received comments via Twitter and even phone calls (how retro) to talk about exactly how serious this is.

Since writing my piece, all of the various mission groups have come out with their reactions, and this is reported in the THE. HEFCE welcomes the change, especially the commitment to STEM subjects; OFFA say it is “excellent news for fair access”; UUK welcomed the news, but cautions of the need for more details about long term sustainability; the Russell Group argue that quality should be prioritised over quantity; Million+ welcome the commitment to mass higher education; University Alliance said that the increase in graduates will enable the UK to meet for skilled graduates, and QAA said this presents an unprecedented opportunity for universities and colleges.

David Willetts writing in “Robbins Revisited” states “analysis suggested that the number of additional qualified applicants who could enter higher education by 2035 will be 460,000 (an increase of about 100,000 on the current level of entrants).”

There is a clear commitment to increasing the number of students in higher education, as it is recognised that there are signification benefits to the economy by having a more educated workforce. In addition, there are a large number of non-market benefits that obtain from higher education, which have an indirect effect on government spending on crime and health for instance.

So with all of that general feeling that this is a good thing (apart from the inevitable Russell Group opinion), why am I, and others still concerned?

As I wrote before, opening up the market, and removing the current controls might remove a degree of protectionism. If numbers going to university are going  to rise (and figures of 60,000 extra students are mooted initially), where will they go? Oxbridge and Russell Group universities will not be increasing their intake massively. To deliver the education that they do, requires fantastic staff student ratios that are supported by high levels of research income, and research to inform their teaching. There is a limited amount of research funding out there to bid for, and equally, there might be a limited number of staff who are capable of generation it. This group are unlikely to take up significant extra numbers

The universities in the middle of the league tables may be best placed If they have used the recent years of easy loans and cheap finance to reinvest in their campuses and facilities, and their overall market offer, They will have risen up the league tables (see Coventry a an example) and they will be desirable enough to be able to expand and take on more undergraduate students. Their greater focus on student experience could mean an attractive offer for full time undergraduate students, and so they will be able to recruit students who might otherwise have gone to the universities lower down the league tables.

And so we come to them. Fishing at the bottom of the pond, and recruiting student with low UCAS tarrifs might be  a risky place to be. Potential students will be able to trade up to the group described above. Equally, there will be a greater challenge from HE in FE provision and from private providers, both of whom can undercut on price, and for whom restrictions will also cease.

Writing in the Financial Times on 5th December 2013, Emran Mian (of the Social Market Foundation) suggests that the “flipside of changes is they will increase pressure on poor-performing universities”.

” Removing the cap on the system overall should mean that any individual university, including new entrants, can recruit without a cap on their growth as well. At the moment, numbers are controlled both at the level of the system as a whole and at each institution. If both caps are removed in 2015-16 this will mean that universities can choose to “go for growth”, providing innovation in their course offerings, improving the student experience or potentially dropping their fees to win students from their competitors.

The flipside of these changes is they are likely to increase very significantly the pressure on poor-performing universities. In a system where supply is constrained and demand exceeds supply by a comfortable margin, everyone can fill their classrooms. Lift the caps and then quality and price start to matter much more.”

And from the Social Market Foundation website:

“Expanding student places makes a lot of economic sense. A third of the increase in labour productivity between 1994 and 2005 was due to higher numbers of graduates in the workforce. By allowing universities to increase recruitment, the Chancellor is encouraging strong, middle-rank universities and new entrants to expand and put pressure on the universities at the bottom. This should mean those universities have to innovate more and offer lower fees.”

So where does this leave us?

Firstly, we need to see the detail from HEFCE on how next years extra places will be allocated in the last year of SNC, but then this university and others will need to have some hard conversations about what we really need to do now, as we could clearly be one of the universities under pressure (remember, this article is based on personal opinions).

Here’s what I would suggest doing immediately:

• Work as hard as possible to make sure that the university is NOT at the bottom of the league tables, so that we can become a destination university.
• Make sure that improving student attainment, satisfaction and employability is central to everything that we do.
• Review our current recruitment planning process – for one year it won’t be worth looking at targets for ABB students an others, and centrally developed targets across faculties. Once the cap is removed there will be no need to allocate numbers to faculties, provided they are able to resource activity. Use the time to develop a recruitment strategy for 2015-16
• Use management information on portfolio performance more rigorously – if an award produces only 29% of students with good degrees, it damages our league table performance – do we want large numbers of students in that area, or do we need to improve their experience and outcomes?
• Quality and price are going to matter, we won’t want to reduce price, so how do we drive up quality -we need to make a significant step change?
• Identify what we have that really is unique – some specialist courses maybe, or 2 year fast track awards?
• Develop opportunities for recruiting students from growing markets such as the “MINTs” (Mexico, Indonesia, Nigeria and Turkey)

This could be the time that the free market really starts to hit higher education. Changes to fees and finance are probably not far away, but there could be a feeding frenzy at the bottom of the market in a very short time. We need to make sure that we are not part of that.