Unit 3, Part 2

British universities are like the car industry of the sixties – under-invested and unprepared for the growing global competition -- vice-chancellors have been warned in a robust wake-up call.

Radical reforms, including wholesale mergers and regional networks of institutions, are being explored by university heads following a controversial review of the long-term prospects of UK universities.

The discussion paper was presented during a Committee of Vice-Chancellors and Principals meeting last week by one of the most experienced figures in higher education policy circles, University of Southampton's vice-chancellor Professor Howard Newby. It comes only a year after the Government's response to the 18-month-long Dearing review of universities.

Newby urged vice-chancellors to consider profound structural changes as they prepare for a global higher education market, more competition from the private sector, and increasingly diverse demands from an expanding student population. His review backs the widely held assumption among academics that universities will have to raise student fees.

The Newby review highlights some ominous trends for UK universities over the next 10-15 years. Fuelled by the explosion of computing and the emergence of English as the international language, US organisations are poised to exploit the increasingly global marketplace through distance-learning courses.

As universities start to offer a wider range of training, including professional development courses, to meet the demands of an increasingly diverse student population, they are moving into the very areas being eyed by private competitors.

Students will be more like customers and academics require more formal training and career development. The investment needed in courseware, buildings and infrastructure is vast. Long-term, this might mean students paying higher tuition fees. "The sector has been caught between a government imperative to expand higher education to sustain a globally competitive economy, on the one hand, and an equally important government imperative to limit public expenditure on the other," argues the paper.

Universities have not "been able to develop a true market for higher education, nor have they been encouraged to restructure the sector to meet the globally competitive challenges outlined above. Rather like the British car industry in the 1960s, we have a sector which is under-invested and structured to meet local/national need rather than to compete within a global marketplace."

Newby's report seeks to develop the long-term vision for universities so lacking in the Dearing report. "The [Dearing] report contains the curious recommendation that another enquiry be established five years hence, perhaps offering an implicit recognition that there was neither time nor resources to investigate thoroughly some of the broader issues," it says. "Dearing ... produced a short-term political fix, but left a long-term policy vacuum."

Yet the Dearing report did outline the many aims and objectives for universities in the next century: to create a culture of learning for all ages and social classes, to help revive regional economies, and to carry out research and technological innovation. Newby thinks these goals can only be achieved through a new division of labour among universities. Vice-chancellors are to consider the feasibility of four future scenarios for universities.

The first proposes government grants for institutions according to how well they have met their agreed strategies and objectives, encouraging institutions to work with, not against, each other. Another scenario envisages regional "networked institutions", with several campuses providing different types of courses and degrees. The third suggests mergers and alliances to handle the cost of mass higher education. The fourth asks if collaboration between universities could be improved under existing arrangements.