Ninety per cent of?vice-chancellors feel UK?universities have ¡°never faced greater threats or?uncertainties¡±, amid worsening relations with the Westminster government and the Office for Students in?particular, but some envisage a?more collaborative, region-focused future beyond markets and competition.

The findings come from the latest edition of , this year based on?responses from 40?leaders, supplemented by 15?follow-up interviews, published on 12?October and shared exclusively with Times Higher Education.

¡°UK universities are facing unprecedented challenges on multiple fronts, beset by?criticisms of?the cost and quality of?educational provision, poor post-graduation outcomes for students, culture wars on campuses, and unsustainable financial deficits,¡± says the survey report.

Ninety per cent of survey respondents agreed with the statement that ¡°the UK university sector has never faced greater threats or uncertainties¡±.

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In England, where the freeze in the tuition fee cap at??9,250 means a long-running real-terms cut in teaching funding, ¡°40?per cent of respondents predict this [the freeze] could cause a decline in home student recruitment as degree provision becomes uneconomic¡±, says the report.

¡°The sector is in unprecedented times, and it is anybody¡¯s guess how things will develop,¡± said one vice-chancellor quoted in the report. ¡°There is no?other sector where costs rise, and there is no?potential to increase the unit of?income.¡±

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¡°While I?have always been doubtful about the predicted financial collapse of universities in the UK, I?do?think that the outlook for quite a few institutions is grim,¡± said another.

Ian Matthias, higher education lead partner at PA?Consulting, a co-author on the report, said the level of concern among leaders was ¡°as?high as it has been¡± over the 12 years of the company¡¯s survey.

Alongside financial uncertainty, ¡°crucially in this year¡¯s report, so much of it [the concern] was focused on the fractious relationships with government and the regulators¡±, he added.

In England, ¡°attitudes towards the relationship with the OfS [Office for Students] are negative, especially in the context of government ministers¡¯ critical rhetoric¡±, says the report.

With home student recruitment now ¡°loss-making¡±, with research funding not meeting full economic costs and with increasing barriers to international student recruitment arising from UK government rhetoric or policy, there was an increasing feeling among vice-chancellors that ¡°the things that have got us through in the past are now starting to be counterproductive¡±, said Mike Boxall, senior adviser on higher education at PA?Consulting and a co-author on the report.

When it comes to solutions, 80?per cent of respondents agreed with the statement that ¡°the university system needs to embrace fundamental reforms in?order to?survive¡±.

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Interviewees often saw the turn towards the role of universities in their regional economies, including via civic university agreements with local authorities, local NHS trusts or further education colleges, ¡°as the basis for more extensive city or regional higher and further education systems¡±.

Another solution envisaged by some lies in moves towards a more integrated tertiary system, as the Welsh government is encouraging via a new single regulator for post-16 education and university research. ¡°Interviewees report that universities are building closer links with further education colleges, for example to franchise courses or co-ordinate pathways,¡± the report says.

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¡°While untested, this new joined-up approach is a positive step towards integration, alignment, and improved learning pathways.¡±

Vice-chancellors are often seeking ¡°much more open, collaborative, probably place-based systems¡±, said Mr Boxall. But they also reported that ¡°the thing that gets in the way of that is competition¡±, he added. ¡°There¡¯s so much competition hard-wired into every element of [the system].¡±

According to the report, ¡°Interviewees point to multiple examples of failed inter-provider collaborations and partnerships due to issues around institutional autonomy and market shares, and suggest shifting the focus of funding from activity and inputs to economic or social outcomes.¡±

Artificial intelligence is viewed by some leaders as another potential solution. ¡°Over a?third of respondents (35?per cent) think AI and global digital services will fundamentally change the higher education environment,¡± says the report.

Mr Matthias said: ¡°It¡¯s great hearing vice-chancellors talk about how they can use this technology to provide hyper-personalisation of [the student] experience and truly transform their business model. There¡¯s still a long way to go when we compare ourselves to healthcare or financial services, but certainly vice-chancellors are picking up the baton on this.¡±

Overall, he continued, ¡°there¡¯s a feeling from vice-chancellors that no?government is coming to their rescue, so they need to get on with?it¡±, a?spirit that left the report authors ¡°feeling really optimistic about the future of the sector¡±.

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john.morgan@timeshighereducation.com