Transcript of "Funding environment for universities"
The fundingenvironmentfor universitiesan assessmentWWW.UNIVERSITIESUK.AC.UKHigher education – a core strategic asset to the UKHIGHEREDUCATIONIN FOCUS:NEW HORIZONS
ii PROFESSORS & PATIENTS: A PICTURE OF HEALTH & EDUCATIONSection C: International undergraduate and postgraduate studentsForewordUniversities are essential to sustaining long-termeconomic growth, and to influencing political, socialand cultural life in the UK. They develop a highly-skilled workforce, training undergraduate andpostgraduate students who equip the UK economywith the knowledge it needs to grow, and help itbe resilient to future economic shocks. They attractand exchange information with researchers aroundthe world, enabling the UK to compete on theinternational stage. They bring about technologicalchange and improved health and public policyoutcomes through the generation and exploitation ofcutting edge research.A sustainable funding environment is crucialfor the UK’s universities to maximise theircontribution to economic growth. From 2011 to thepresent day and beyond, the UK’s universities areexperiencing unprecedented changes in the policyenvironment, in the funding of higher education,and in the recruitment of international students.These changes are occurring against the backdropof a volatile external economic environment andsignificant demographic developments. All ofthis has implications for the funding and financialsustainability of our universities.This report examines the patterns in undergraduate,postgraduate and international student recruitmentand how these are affecting the UK’s universities. Aparticular focus is given to the outcomes in 2012–13.The report’s main focus is on full-time students;part-time students will be covered in a separatereport published later in 2013.The report’s highlights include the following:–– Higher education institutions in Englandundertook a wide range of preparations for the2012 cycle of UK undergraduate admissions.However, overall recruitment was still 9% lowerthan anticipated. This shortfall may in part bedue to institutions’ concerns about penalties forunder or over recruitment.–– While a recent fall in UK postgraduate taughtstudents was compensated by continuedgrowth in EU and non-EU students, there areindications that postgraduate taught studentsfrom across the UK, EU and non-EU fell in2011–12. Some institutions are reportingfurther falls in the number of postgraduatetaught students from the UK for 2012–13.–– The number of first year non-EU studentsstudying in the UK decreased marginally in2011, contrasting with strong growth in recentyears. However, significant falls in the numberof new entrants are being experienced in 2012–13 from countries including India, Pakistan andNigeria.There is continued strong demand fromChina.The UK’s universities have demonstrated theirreadiness to embrace change by modifyingtheir financial strategies to prepare for uncertaintimes ahead. However, this report finds thatinstitutions face a number of challenges in the shortto medium term in funding capital expenditure.There is also evidence to suggest that the sectoris significantly constrained in terms of its ability toexpand in a sustainable manner in the medium term.This has long-term implications for the UK’s skilledworkforce, productivity, and economic growth.Factors constraining the ability of universitiesto expand undergraduate and postgraduate provisionwill inhibit the future economic potential andcompetitiveness of the UK. These constraints mustbe overcome if the UK is to retain its hard-won globalcompetitive advantage.Professor Eric ThomasPresident, Universities UK and Vice-Chancellor,University of Bristol
IN FOCUS 1Contents1. INTRODUCTION1.1 Purpose and scope of the report 41.2 2012–13 outcomes and availability of data 41.3 Structure of the report and key findings 42. The Market For Uk- and Eu-Domiciled Undergraduate Students 2.1 Scope of this chapter 72.2 Overview of the higher education reforms 72.3 Availability of data 92.4 Outcomes for UK- and EU-domiciled undergraduatestudents for 2012–13 102.5 Outcomes for institutions in England for 2012–13 202.6 Factors driving outcomes of the 2012 admissionscycle for students and institutions 283. THE MARKET FOR UK- AND EU-DOMICILEDPOSTGRADUATE STUDENTS 3.1 Scope of this chapter 313.2 Overview of funding arrangements and availability of data 313.3 Outcomes for UK- and EU-domiciled postgraduatestudents in the run-up to 2012–13 333.4 Implications for the UK’s higher educationsector and economy 374. THE MARKET FOR NON-EU-DOMICILED UNDERGRADUATEAND POSTGRADUATE STUDENTS 4.1 Scope of this chapter 414.2 Overview of the reforms to immigration 414.3 Availability of data 414.4 Outcomes for non-EU-domiciled undergraduateand postgraduate students in 2011–12 434.5 Outcomes for non-EU-domiciled undergraduateand postgraduate students in 2012–13 464.6 Implications for the UK’s international competitiveness,higher education sector and economy 50
25. TRENDS IN INCOME AND EXPENDITUREFOR HIGHER EDUCATION INSTITUTIONS 5.1 Scope of this chapter and availability of data 555.2 Trends in income and expenditure in the run-upto 2012–13 555.3 Changes in 2012–13 and the outlook up to 2014–15 585.4 Funding of capital investment 605.5 Implications for the UK’s international competitivenessand the long-term sustainability of the highereducation sector 62Definitions 64
4The funding environment for universities: an assessment1.1. Purpose and scope of the report2011 and 2012 were defining years for the UK’shigher education sector. They were marked by globaleconomic uncertainty, demographic change, and theintroduction of significant changes to the funding ofundergraduate students, and student immigration.This report examines the impact on the sector ofthese pervasive changes.The report predominantly focuses on three areasof higher education provision in the UK:–– UK- and EU-domiciled undergraduate students–– UK- and EU-domiciled postgraduate students–– Non-EU-domiciled undergraduate andpostgraduate studentsIt analyses changes in these three areas ofstudent provision along with changes in capitalfunding. Implications for the long-term financialsustainability of the higher education sector arealso set out.For each area, the report examines demand fromstudents and provision supplied by institutions in theyears leading up to 2012–13. In addition, it explores2012–13 outcomes as far as the available dataallows. It also analyses the potential factors drivingchanges in supply and demand in the run-up to2012–13.The report covers all UK higher educationinstitutions in analysing the markets for UK- andEU-domiciled postgraduate students, and non-EUundergraduate and postgraduate students. However,in analysing the market for UK- and EU-domiciledundergraduate students, the report focuses onlyon provision by institutions in England. This is dueto the divergence of funding policies across thedevolved administrations.The report’s main focus is on full-time students. Theimpact of policy changes on part-time higher educationis the subject of a separate Universities UK review,which will report later in 2013. Changes in health andteacher training policy will be covered in a separatereport.1.2. 2012–13 outcomes and availabilityof dataThis report monitors changes in UK- and EU-domiciled undergraduates, UK- and EU-domiciledpostgraduates, and international students in thecontext of a changing policy environment in 2011and 2012. In particular, the outcomes relating tothe 2012–13 academic year are compared withrecent years.The main policy changes in 2011 and 2012considered in the report include the following:• Reforms to the funding of undergraduatestudents in England, including changesto fee-setting by universities, and changesto recruitment by institutions throughderegulation and the operation of studentnumber controls• Reforms to student immigration to the UK,affecting a student’s entry requirements,their entitlements during study and theoptions available to them afterwardsWhile these policies were implemented in 2011 and2012, the data available to assess 2012–13 outcomesis still emerging. As we stated in our response tothe government’s Higher Education White Paper,a thorough assessment of 2012–13 outcomes isunlikely to be possible until March 2014 at theearliest.This report uses all publicly available data sourcesup until April 2013, combined with qualitativeintelligence gathered from the higher educationsector, to monitor 2012–13 outcomes. Given theavailability of data, the assessment set out in thisreport should be considered as interim in nature;UUK will publish further updates in due course.1.3. Structure of the report andkey findingsThe report is structured as follows:Chapter 2 covers the market for UK- and EU-domiciled undergraduate students. It gives anoverview of the higher education reforms and2012–13 outcomes. It examines outcomes relatingto particular groups of students and the impacton higher education institutions in England.Chapter 3 covers the market for UK- and EU-domiciled postgraduate students, with a focuson outcomes leading up to 2012–13. However,it should be noted that the full effect of reformsto undergraduate funding will not be felt on thoseprogressing to postgraduate study until2015–16 at the earliest.Chapter 4 covers the market for non-EU-domiciledundergraduate and postgraduate students, and givesan overview of the immigration reforms. It examinesoutcomes in the lead up to 2012–13, and evidencegiving an early indication of 2012–13 outcomes.
IN FOCUS 5IntroductionChapter 5 draws together the various impacts onthe different markets in chapters 2 to 4, and givesan overview of resulting trends in income andexpenditure in the run-up to 2012–13. It then takesa look forward at implications for the long-termfinancial sustainability of the higher educationsector in England, with consequences for thefuture economic potential of the UK.Key findings of the report include:–– The number of UK full-time undergraduatemature (aged 21 and over) students acceptedinto higher education fell by 4% in 2012.This marked the second consecutive yearof falls for this group. It is as yet unclearwhether this is a temporary fall or marksa more permanent trend.–– The likelihood that a person will enteruniversity is dependent on their socio-economicbackground, and pronounced differencesexist between different socio-economic groups.These differences remained pronounced for18-year-olds applying from England in 2012.–– Higher education institutions in Englandengaged in a wide range of activitiesin preparation for the 2012 cycle of UKundergraduate admissions. There was anincreased focus on understanding their relativeposition in the market, on the student-facingelements of the recruitment process and ontheir offer-making strategies. However, overallrecruitment to higher education institutionsin England for 2012–13 was 9% lower thananticipated. This shortfall may in part be due toinstitutions’ concerns about penalties for underor over recruitment.–– Since 2010, the number of UK postgraduatetaught students has fallen. While this wascompensated for by growth in EU and non-EUpostgraduate students in 2010–11, the numberof EU and non-EU postgraduates fell in 2011–12. Some institutions are reporting further fallsin the number of postgraduate taught studentsfrom the UK for 2012–13.–– The number of first year non-EU studentsdecreased marginally in 2011, contrasting withstrong growth in recent years. A UUK surveyshows institutions are experiencing significantfalls in the number of new entrants in 2012–13from countries including India, Pakistan andNigeria. There is continued strong demandfrom China.–– Changes in the number of UK undergraduateand postgraduate students, as well as EUand non-EU students, affect the income ofinstitutions. Institutions are increasinglybuilding buffers into their planned incomeand expenditure to prepare for increaseduncertainty and to pursue longer-term plansfor capital investment. Potential downside risksto student recruitment from domestic andinternational sources will have a significantimpact on the ability of institutions to maintainand improve the quality of teaching andresearch infrastructure.This report will be followed by further UUKpublications in 2013–14 that will examine thefollowing topics in more detail:• Factors that are constraining the ability ofuniversities to expand undergraduate andpostgraduate provision• How part-time and mature student provisioncan be developed to meet the UK’s future skillsneeds, as part of UUK’s Part-time Review1• Changes in health and teacher training policy,and the implications for institutions1. For more information see www.universitiesuk.ac.uk/aboutus/whatwedo/policyanalysis/studentsteachingsociety/pages/thomasreview.aspx
chapter 2:THE MARKET FOR UK- AND EU-DOMICILEDUNDERGRADUATE STUDENTS
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 72.1 Scope of this chapterThis chapter examines recent outcomes for full-timeUK- and EU-domiciled undergraduate students,with a focus on outcomes in 2012–13 for particulargroups of students, and the impact on highereducation institutions in England. The analysis ofthe impact on students covers those from all UKdomiciles, studying at all UK higher educationinstitutions (in section 2.4). However, in analysing theimpact on the sector, the chapter only covers highereducation institutions in England (in section 2.5).This is due to a divergence of funding and supply-side policies across the devolved administrations.The chapter concludes with an overview of the mainfactors driving the outcomes of the 2012 admissionscycle (in section 2.6).2.2 Overview of the highereducation reformsIn 2010, the government passed higher educationreforms with the aim of delivering a high-qualityuniversity sector for the UK that is more responsiveto the needs of students. In particular, the reformswould implement a significant switch from publicmoney supporting higher education through teachinggrants to loans to fund graduate contributions.Key elements of the reforms for institutions inEngland included the following:• Any university or college being able to chargea fee of up to £6,000, or if they meet conditionson widening participation and fair access, beingable to charge up to £9,000• Universities to individually decide what they willeach charge, including whether different levelsof charges will apply for different courses• The phasing out of teaching grants, with thelimited remaining income focused on priority areaswhere tuition fees alone may not meet all costs• Graduates to not make a contribution towardstuition costs until they are earning at least£21,000 (gross, per year), with this thresholduprated in line with earnings from April 2016• Repayments to be 9% of income above £21,000,and all outstanding repayments written offafter 30 years• A real rate of interest to be charged on loanrepayments for graduates earning above£21,000, at a tapered rate for graduatesearning between £21,000 and £41,000, up to amaximum of RPI plus 3%. Graduates earningabove £41,000 to be charged the maximum realrate of interest, rate of RPI plus 3%The reforms would take effect for the intake ofnew students in the 2012–13 academic year atinstitutions in England.Governments in Scotland, Wales and Northern Irelandsubsequently announced policies on the level ofgraduate contribution to be paid for full-time studentsdomiciled in their home country and applying touniversity in their home country. Table 2.1 shows thediffering arrangements for students domiciled in aparticular country, and applying to study in a particularcountry. The main arrangements included:• English-domiciled students entering universityin 2012–13 in any of the four UK countrieswould pay up to £9,000, while those whoentered in 2011–12 had to pay up to £3,375.• For Welsh-domiciled students entering universityin 2012–13, the Welsh Assembly Governmentwould pay the difference between £3,575 and thefee charged by an institution up to a maximum of£9,000. This would apply no matter which countryin the UK the student decided to study in.• Scottish-domiciled students entering universityin 2012–13 would continue to pay no tuition feeif they chose to study in Scotland, but wouldneed to pay the fee charged by an institutionlocated outside Scotland.• Northern Irish-domiciled students enteringuniversity in 2012–13 would pay no morethan £3,465 if they chose to study in NorthernIreland, but would need to pay the feecharged by an institution located outsideNorthern Ireland.In addition to the reforms announced in 2010, in2011 the government published a White Paper,2setting out policy changes affecting the provisionof higher education in England. It envisaged agreater role for competition between highereducation providers, including encouraging the entryof new providers, and the partial deregulation ofstudent number controls.The increase in demand for higher education overthe last decade (Figure 2.1) has placed pressures onpublic funding elements of student support budgets.These included short-term public spending to meetup-front costs of all fees and grants, and longer-term costs where fee and maintenance loans maynot be repaid in full.2. BIS (2011) Higher education: Students at the heart of the system
8The funding environment for universities: an assessmentFigure 2.1: First year UK- and EU-domiciledenrolments to undergraduate courses at Englishhigher education institutions by mode of study2002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Full timePart time150,000200,000250,000300,000350,000400,000450,000Source: HESAAs a consequence, since 2009–10, controls havebeen in place on the maximum number of publicly-funded students that each institution can recruit,to avoid unplanned growth and over-recruitment.The cap is broadly applicable to all UK- and EU-domiciled full-time undergraduate entrants andentrants to Professional Graduate Certificate inEducation (PGCE) provision who may receive fundingfrom the Higher Education Funding Council forEngland (HEFCE). Although part-time studentsalso receive public support in 2012–13, through theprovision of subsidised loans, they are not includedin the control of student numbers.Table 2.2: Changes to student number controlsarising from the White PaperStudentswith entryqualificationsequivalent toAAB at A-leveland aboveAll institutions are free to recruit as manyof these applicants as they like in 2012–13Removed from student number controlsbased on historic numbers in 2010–11 andan assumption of growth by 2012–13Estimation that this group would accountfor just over 85,000 of all entrants in2012–13Placesallocatedthrough acompetitivemarginRe-allocation of 20,000 places toproviders with average fees (after waivers)of below £7,500 per yearMargin created through a pro rata cut, ofroughly 9%, to student number controllimits at all HEFCE-funded institutionsThe White Paper signalled two major changes to beimplemented in relation to student number controls.The details for implementation were subject toconsultation with the sector. The first change wasthat student number controls were to be removedfor those students with entry grades equivalentto AAB or above at A-level. Additionally a ‘margin’of places was to be created and reallocated onthe basis of cost and quality. With these proposedchanges the government aimed to increasecompetition between providers, and in turn producea system that was more responsive to studentdemand (Table 2.2).Table 2.1: Fee arrangements across the UKStudents studying in 2012–13 inEngland Wales Scotland Northern IrelandStudentsdomiciledinEngland Variable fee up to £9,000 Variable fee up to £9,000 Variable fee up to £9,000 Variable fee up to £9,000Wales Variable fee up to £9,000(with fees above £3,575paid by the WelshGovernment)Variable fee up to £9,000(with fees above £3,575paid by the WelshGovernment)Variable fee up to £9,000(with fees above £3,575paid by the WelshGovernment)Variable fee up to £9,000(with fees above £3,575paid by the WelshGovernment)Scotland Variable fee up to £9,000 Variable fee up to £9,000 No fees Variable fee up to £9,000NorthernIrelandVariable fee up to £9,000 Variable fee up to £9,000 Variable fee up to £9,000 Variable fee up to £3,465EU Fees as for Englishstudent studying inEnglandFees as for Welshstudent studying inWalesFees as for Scottishstudent studying inScotlandFees as for NorthernIrish student studying inNorthern Ireland
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 92.3 Availability of dataTable 2.3 illustrates the timing of actions taken byUK and EU undergraduate applicants and Englishinstitutions for entry into higher education in 2012–13.The corresponding timescale on the availability ofevidence to illustrate these actions and outcomesis also shown. There is a substantial lag betweenpublicly available data and 2012–13 outcomes.While data on those applying, and being accepted,into university in 2012–13 is available in 2012 and2013, final data on the number of students actuallyenrolling in university, by institution, will not beavailable until early 2014. The remainder of chapter2 uses all publicly available data sources up untilApril 2013 to ascertain changes in the entry of UKand EU undergraduate students and entry to Englishinstitutions in 2012–13, but due to data availabilitythis is, necessarily, an interim assessment.Table 2.3: Timescales of 2012–13 outcomes and evidence for recruitment of UK- and EU-domiciledundergraduate students in EnglandDate Announcements and actions relating to 2012–13recruitmentEvidence of outcomes for 2012–13 (source)2011 June–December Government publishes Higher Education White PaperUniversities make decisions on fees for 2012–13entry and submit access agreements to OFFA OFFA’s decisions on access agreements Fee levels for institutions and accessarrangements (OFFA) Students start applying for entry in 2012–13 Early indications of the numbers applying tohigher education (UCAS)Invitation to bid for margin places in 2012–13Outcomes of HEFCE’s consultation on teachingfunding and student number controls for 2012–132012 January Allocations of funding, student number controls andguidance on 2012–13 recruitment announced bygovernmentAllocations of funding and student numbercontrols for 2012–13 (HEFCE)January–June Students continue applying for 2012–13 Firmer indications of the numbers applying tohigher education (UCAS)July–August A–level results day, confirmation and clearing period Indications of the numbers being accepted intohigher education (UCAS)August–December Outcomes finalised for students and institutions onrecruitment into 2012–13Final figures for the numbers being acceptedinto higher education (UCAS) Initial indications of student enrolments (HEFCE) Indications of student finance costs (SLC*)2013 January–June Indications of the numbers being accepted intohigher education, by institution (UCAS)2014 January–June Final data on student enrolments in 2012–13 byinstitution (HESA)* Data not publicly availableUCAS: Universities and Colleges Admissions ServiceHESA: Higher Education Statistics AgencySLC: Student Loans CompanyOFFA: Office for Fair AccessHEFCE: Higher Education Funding Council for England
10The funding environment for universities: an assessment2.4 Outcomes for UK- and EU-domiciledundergraduate students for 2012–13Section 2.4 gives an overview of outcomes for thoseapplying and those accepted into higher educationfor 2012–13 across all UK higher educationinstitutions. The aggregate numbers include medical,dental and teacher training numbers, which aresubject to government targets.Figure 2.2 shows that the total number of students3applying to higher education in 2012 (applicants) fellby 46,524 from 2011 (a fall of 6.6%). Those acceptedfor entry into higher education (accepted applicants)fell by 27,120 (5.5%). Not all students applying tohigher education are accepted, or choose to enter.Those who choose to accept as a proportion to thosewho apply is the acceptance rate. Hence the smallerfall in acceptances compared with applicantsreflects a rise in the acceptance rate.Figure 2.2 also shows trends in applicants andacceptances from 2006, as there is evidence tosuggest that 2011 was not a typical year in termsof overall trends. More detail on this is providedlater, in section 18.104.22.168.1 Trends in applicants and acceptancesby country of domicileIn 2012, the number of UK-domiciled applicantsdecreased by 7.6% from 2011, and UK-domiciledacceptances decreased by 5.5%. Figure 2.3 showsthat changes in applicants and acceptances between2011 and 2012 vary considerably in the UK by thecountry of domicile of the applicant:• The number applying from England to study ata UK institution fell by 8.6% in 2012, though thenumber accepted fell by slightly less, 6.6%.• The number applying from Scotland to studyat a UK institution fell by 2% in 2012; however,the number accepted rose by 0.3%. Whileacceptances of students from Scotland intoinstitutions in England and Wales fell in 2012, thiswas offset by an increase in acceptances intoinstitutions in Scotland and Northern Ireland.• The number applying from Wales to study ata UK institution fell by 0.5%, but the numberaccepted rose by 5.3%. The increase inacceptances of students from Wales wasmainly driven by an increase in acceptancesto institutions in England.• The number applying from Northern Irelandto study at a UK institution fell by 4.3%, withthe number accepted falling by 3.7%. However,acceptances of students from Northern Irelandinto institutions in Northern Ireland increasedby 4.4%.Figure 2.4 shows the cross-border flows ofacceptances in more detail.3. Including UK-, EU- and non-EU-domiciled studentsFigure 2.2: Total applicants and acceptedapplicants, 2006–122006 2007 2008 2009 2010 2011 2012Total applicants Acceptance rate0200,000300,000100,000400,000500,000600,000700,000800,000 80%75%70%65%60%55%50%Total acceptedapplicantsApplicantsAcceptancerateSource: UCASFigure 2.3: Applicants and acceptances by UKcountry of domicile, 2006–2012English applicants Welsh applicantsN. Irish applicants0100,000200,000300,000400,000500,000450,000350,000250,000150,00050,00080,00070,00060,00050,00040,00030,00020,00010,0000Scottish applicantsEnglish acceptancesWelsh acceptances N. Irish acceptancesScottish acceptances2006 2007 2008 2009 2010 2011 2012EnglishapplicantsandacceptancesAllotherapplicantsandacceptancesSource: UCAS
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 11Figure 2.5: Acceptances by entry year (2012–13) and cycle year (2012) and country of institution2009 2010 2011 2012UK entry300,000350,000450,000400,000UK cycleEngland entryEngland cycleScotland entryScotland cycleWales entryWales cycleNorthern Ireland entryNorthern Ireland cycleAcceptances2009 2010 2011 2012010,00020,00030,00040,00035,00025,00015,0005,000AcceptancesSource: UCASFigure 2.4: Cross-border acceptances at the end of 2012 cycleSource: UCAS13.2%Country of institutionEnglandEnglish studentScottish studentWelsh studentN. Irish studentEU studentNon-EU studentN. Ireland Scotland Wales-6.6%-23,336329,945843367584,044-1,9209,577-1811,45872628729,362-14538517,313-442211511111,875-6523,2093819,022-166907-72145-3,59817,348194591304,401-191,02564329,5236195-2503,115-2071,453-11.0%-16.9%-17.2%2.2%33.3%36.8%4.4%4.3%-50.0%3.2%23.1%1.0%-15.5%3.0%23.7%-7.4%-16.7%-20.9%-33.2%-1.8%0.9%-12.5%Percentage change:-50% 50%0%4Acceptances300,000200,000100,000The figure on the left andthe colour of the circlegive the percentagechange from 2011 to 2012The black figure on theright gives the changefrom 2011 to 2012The size of the circle andthe grey figure give thenumber of acceptances
12The funding environment for universities: an assessmentFigure 2.7: Total percentage decrease in acceptances for EU countries (for countries with more than 600students accepted) between 2011 and 2012, by number of acceptances in 2012= 100 acceptancesCyprus-19%Percentage changePercentage changeFrance-11.3%Ireland-14%Germany-20.6%Romania-10.4%Bulgaria-8%Greece-14.1%Italy+7.4%Lithuania-32.5%Spain-4.5%Poland-10.2%Sweden-14.3%Percentage change:-50% 50%0%Source: UCASAcceptances in 2011 and 2012 differed accordingto the method of measurement, with resultsvarying by year of entry, compared with the yearof the cycle that students applied in. The differencewas particularly marked for institutions in England,with less of a difference for institutions in Scotland,Wales and Northern Ireland. The difference betweenthe two methods of measurement is mainly relatedto deferrals – a proportion of students applying inany given year will defer their entry to the followingyear. For example, for English institutions in2010 around 23,600 students chose to delay theirentry until 2011–12. However, in 2011 only 9,516students chose to delay their entry until 2012–13,less than half the level of the previous year. Figure2.5 shows that changes in deferral behaviourtranslate to more pronounced rises and falls inacceptances in 2011 and 2012 when viewed by entryyear compared with cycle year.The number of students applying in 2012 from therest of the EU fell by 12.4%. Those accepted for entryfell by 13%, around 3,500 fewer acceptances. Figure2.6 shows that this represents a marked changefrom recent trends in applicants and acceptancesfrom the rest of the EU, which to some extent hasnot been reflected in applicants and acceptancesfrom outside the EU. The fall in acceptancesfrom the rest of the EU has mainly been drivenby a fall in acceptances to institutions in England,with acceptances to institutions in Scotland andNorthern Ireland increasing.The EU countries accounting for the largestshare of acceptances were France, Irelandand Cyprus, as shown in Figure 2.7, and fallsfrom these countries accounted for more thana third of the fall in acceptances from outsidethe UK. Significant percentage falls were seenin students applying from Lithuania (32.5%) andGermany (20.6%). The fall in students applyingfrom Germany has occurred in spite of a doublecohort of pupils being awarded their A-levels inparts of Germany, which is estimated to add morethan 100,000 applicants between 2011 and 2013.Figure 2.6: Applicants and acceptances for EU-and non-EU domiciled students, 2006–20122006 2008 20102007 2009 2011 2012Non-EU applicantsEU applicants020,00070,00040,00030,00010,00060,00050,000Non-EU acceptancesEU acceptancesSource: UCAS
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 132.4.2 Trends in applicants and acceptancesby age group‘Mature’ students are defined as those aged 21and over, with ‘young’ students aged 20 and under.A quarter of full-time undergraduate entrantsin the UK are in the mature age group. In 2012,around 22% of UK-domiciled acceptances werefrom mature students (Figure 2.8).Figure 2.9 shows that the fall in the number ofstudents from all domiciles applying to highereducation in 2012 from 2011 varied considerablyby age group of the applicant. While there was onlya small fall in the number of 18-year-old applicants,there was a more marked fall in the number of19-year-old applicants. This may be an indicationof students deciding to apply in 2011 when theywere 18, and to not delay applying by a year.Overall, the number of young applicants fromall domiciles fell by 5.7%, with mature applicantsexperiencing a larger fall of 9.2%. For matureapplicants, the largest percentage fall was forthose aged between 21 and 39 years, a fall ofaround 10%. The fall for applicants aged 40 andover was 7%.Some of the falls in those applying to highereducation in 2012 from 2011 may have been drivenby demographic change. Therefore it may be moreinformative to look at application rates, whichmeasure the proportion of the population applyingto higher education, rather than the absolutenumbers applying. Figure 2.10 shows that while,to some extent, the fall in 18-year-olds applying tohigher education can be explained by demographicchange, there are falls over and above changes indemography for other age groups.Figure 2.8: Composition of UK acceptances by age group, in percentage and aggregate terms, 2007–20122008 20102007 2009 2011 2012Young0%100%40%20%80%60%Mature%ofacceptancesSource: UCAS2008 20102007 2009 2011 2012Young050,000100,000150,000200,000250,000300,000350,000MatureAcceptancesFigure 2.9: All applicants by age group, 2006–20120350,000200,000150,00050,000100,000300,000250,00018 and under192021 to 2425 to 3940 and over2006 2008 20102007 2009 2011 2012ApplicantsSource: UCAS
14The funding environment for universities: an assessmentFigure 2.11: Applicants and acceptances by age, 2006–2012, for all applicants0250,000 80%70%60%50%40%30%20%10%0%150,00050,000100,000200,000MatureapplicantsMatureacceptancesAcceptancerateYoungapplicantsYoungacceptancesAcceptancerate2006 2008 2010 2011 20122007 20090600,000 80%70%60%50%40%30%20%10%0%400,000200,000100,000300,000500,0002006 2008 2010 2011 20122007 2009ApplicantsandacceptancesAcceptancerateAcceptancerateApplicantsandacceptancesFigure 2.10: Application rates by selected age groups and country of domicile, 2004–2012Percentage change is shown between 2011 and 2012Source: UCASEnglish domiciled200420052006200720082009201020112012200420052006200720082009201020112012200420052006200720082009201020112012200420052006200720082009201020112012N. Irish domiciled Scottish domiciled Welsh domiciled50%18-year-olds 19-year-oldsYoung application rates20-year-olds21-year-olds 25–29-year-olds 30–39-year-olds40%30%20%10%0%3.0%2.5%2.0%1.5%1.0%0.5%0%3.0%2.5%2.0%1.5%1.0%0.5%0%6%5%4%3%2%1%0%20042005200620072008200920102011201214%12%10%8%6%4%2%0%2004200520062007200820092010201120120.7%0.6%0.5%0.4%0.3%0.2%0.1%0%Mature application rates-3.9%-16.2%-19.3%-17.0%-7.0%-17.1%-4.4%-7.4%-1.6%-19.0%-0.6%1.9%10.8%-2.1%-17.1%-17.1%1.4%4.8%-2.8%-11.0%4.7%1.0%-0.4%0.6%
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 15The fall in the number of mature students applyingto higher education in 2012 followed a period ofstrong growth up to 2010, with a fall in 2011. Whilethere has been strong growth in the number ofmature applicants applying to higher education,there has been more muted growth in the numberof mature students accepted for entry, as Figure2.11 shows. This could be due to applicants notbeing accepted, or those receiving offers choosingnot to take them up. The fall in mature studentsaccepting entry in 2012 was 6.8%.2.4.3 Trends in applicants and acceptancesby socio-economic backgroundThis section examines changes in the numberof those applying and being accepted into highereducation across varying socio-economic backgrounds.Socio-economic background of applicants can bemeasured in a number of ways:–– Participation of Local Areas (POLAR) quintiles,which divide UK wards into five differentgroups, ranging from quintile 1 with thelowest participation of young people in highereducation to quintile 5, with the highest–– The Free School Meals (FSM) measure,an indicator for low income background atthe age of 15–– Educational background, by type of educationalinstitution attended prior to applying to highereducationMeasuring socio-economic background by POLARquintiles, the proportion of the English 18-year-oldpopulation from the most disadvantaged quintileaccepting entry into higher education increasedin 2012, while the proportion of the English18-year-old population from the most advantagedquintile decreased. However, the proportion of the18-year-old population accepting entry into highereducation from the most advantaged quintile is stillthree to four times higher than that of the mostdisadvantaged quintile. Entry rates for applicantsfrom all backgrounds are relatively close to trendsseen between 2006 and 2010.While the proportion of the English 18-year-oldpopulation from the most disadvantaged quintileaccepting entry into higher education in 2012increased, the proportion of this same populationapplying to higher education barely changed.Therefore, the increase in the proportion of thispopulation entering higher education has mainlybeen driven by institutional responses, rather thanapplicant behaviour. However, it is a different storywith the English 18-year-old-population from themost advantaged quintile. In 2012, the proportion ofthis population applying to higher education droppedsignificantly, as shown in Figure 2.12. HEFCE notes,in its 2013 report on the impact of the reforms,4thata greater-than-usual number of more advantaged18-year-olds could have entered in 2011 than 2012.Figure 2.12: Application rates for English 18-year-olds for areas grouped by young higher educationparticipation rate, 2004–201220052004 2006 2008 20102007 2009 2011 2012Quintile 5 Quintile 310%60%30%20%50%40%ApplicationrateQuintile 4Quintile 2 Quintile 1Entry rates for English applicants from allbackgrounds to higher tariff institutions increasedin 2012 (Figure 2.13), although a considerablegap remains between those from disadvantagedbackgrounds and those from advantagedbackgrounds. The proportion of the English18-year-old population from the most advantagedbackgrounds entering high tariff institutions in2012 was 21%, while it was 2.6% for those from themost disadvantaged backgrounds.Figure 2.13: Entry rates of English 18-year-olds tohigher tariff institutions, by background of younghigher education participation rates, 2004–201220052004 2006 2008 20102007 2009 2011 2012Disadvantaged 18-year olds0%25%10%5%20%15%Advantaged 18-year-oldsEntryrateSource: UCAS4. HEFCE (2013) Higher education in England: Impact of the 2012 reformsSource: UCAS
16The funding environment for universities: an assessmentApplicants from the most disadvantaged quintileof the English 18-year-old population were notdeterred from applying to higher tariff institutionsin 2012, with the proportion of applicants from thispopulation remaining stable from 2011. Applicantsfrom the most advantaged quintile of the English18-year-old population were more deterred, withtheir proportion dipping in 2012 (Figure 2.14) –which could be again due to the impact of deferrals.A significant gap remains between the relativeproportions of each.Figure 2.14: Application rates of English 18-year-olds to higher tariff institutions, by backgroundof young higher education participation rates,2004–201220052004 2006 2008 20102007 2009 2011 20120%5%40%35%20%10%15%30%25%ApplicationrateQuintile 5 Quintile 3Quintile 4Quintile 2 Quintile 1The Free School Meals (FSM) measure is usedas an indicator of students from a relativelydisadvantaged background. The measure has itslimitations, however, as it only covers a very smallgroup of students. In addition, some studentseligible to be in this group may choose not to take uptheir entitlement.The proportion of the population in receipt of FSMapplying to higher education is significantly lowerthan the proportion of the population not in receiptof FSM applying to higher education (around 11%,compared with 30%). In 2012, the proportion ofthe population in receipt of FSM applying to highereducation remained constant from 2011. However,the proportion of those applying who subsequentlyaccepted increased. Numbers remain relativelysmall, with the increase in acceptances onlyamounting to around 100.The educational background of those applying tohigher education may also provide an indicatorof socio-economic background. Figure 2.15demonstrates the differences in acceptance levelsbetween state schools and colleges and independentschools, and also how levels differ according to thetype of institution, as measured by their level oftariff points. In 2012 acceptances to institutions withhigh tariffs increased from applicants from bothindependent schools and state schools and colleges,whereas acceptances to institutions with low tariffsdecreased among both groups.Figure 2.15: Acceptances by type of school and institutiontype, UK domiciled only, aged 19 and under, 2006–20122006 2008 20102007 2009 2011 2012High tariff institution Low tariff institutionMedium tariff institutionAcceptancesAcceptances2006 2008 20102007 2009 2011 2012020,00040,00060,00080,000100,000120,000Acceptances from state schools and colleges05,00010,00015,00020,00025,000Acceptances from independent schoolsSource: UCASSource: UCAS
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 172.4.4 Trends in applications and acceptancesby choice of subjectThe fall in UK-domiciled applications in 2012 hasnot been uniformly experienced by all subjects.Applications (choices) to humanities-relatedsubjects fell by 11.7%, whereas science-relatedsubjects fell by only 5.1%. Subjects leading to aprofessional qualification, including medicine,dentistry, veterinary science and law, experienceda fall in UK applications of 5.9%, which is below theaverage fall of 8.7% (Table 2.4).The five subject groups that account for the largestnumber of applications are subjects allied tomedicine, creative arts and design, business andadministrative studies, social studies and biologicalsciences. Together, these five subject groupsaccount for around 50% of all applications. In 2012,applications to all five groups fell collectively by8.3%. Figure 2.16 shows applications for thosegroups – the falls for which accounted for half ofthe total fall in applications in 2012. While creativearts and design and social studies experiencedsome of the strongest declines, falls in businessand administrative studies and biology wererelatively less, and subjects allied to medicineincreased slightly. Acceptances for all five subjectgroups fell, with creative arts and design, businessand administrative studies, and social studiesexperiencing the most pronounced falls.Table 2.4: Applicants for humanities- and science-related subjects, 2008–2012Source: UCASFor UK-domiciled only 2008 2009 2010 2011 2012 % change2011–12Difference2011–12Choices in humanities 1,049,345 1,130,037 1,252,256 1,280,247 1,129,886 -11.7% -150,361 Choices in sciences 833,225 909,778 1,061,295 1,128,525 1,070,514 -5.1% -58,011All choices 1,882,570 2,039,815 2,313,551 2,408,772 2,200,400 -8.7% -208,372 Acceptances in humanities 226,515 235,568 231,849 238,288 222,707 -6.5% -15,581Acceptances in sciences 178,509 189,495 192,785 192,947 184,684 -4.3% -8,263All acceptances 405,024 425,063 424,634 431,235 407,391 -5.5% -23,844Figure 2.16: Applications (choices) and acceptances for selected large subject groups(UK domicile), 2008–20122008 20102009 2011 2012Subjects allied to medicine Business and admin studies0400,000350,000300,000200,000100,000250,00050,000150,0002008 20102009 2011 2012060,00050,00040,00020,00030,00010,000Creative arts and design Biological sciences Social studiesAcceptancesApplicationsSource: UCAS
18The funding environment for universities: an assessmentFigure 2.17: Applications (choices) and acceptances for selected subject groups (UK domicile), 2008–2012Source: UCASFigure 2.18: 2012 UK-domiciled applications (choices) and percentage changes in UK-domiciledapplications from 2009 to 2012 for science-related subjectsSource: UCASFigure 2.17 shows the trend in applications forsome of the smaller subject groups. The magnitudeof falls in historical and philosophical studies,linguistics and classics, mass communications,education and architecture were pronounced, withfalls in languages and technologies less so, thoughthe historically smaller number of applicants inlanguages and technologies should be kept in mind.Relative falls in applications were largely reflected inthe magnitude of falls in acceptances.Figures 2.18 to 2.21 show recent percentage changesfor applications and acceptances of UK-domiciledapplicants for all subject groups. It is importantto bear in mind the size of the subject alongsidethese percentage changes, therefore the bars onthe left-hand side show the number of applicationsand acceptances in 2012. The figures show thatsome subjects with relatively few applications (suchas technologies and non-European languages)experienced the greatest percentage falls in 2012.2008 20102009 2011 2012010,000100,00090,00080,00070,00040,00020,00030,00060,00050,0002008 20102009 2011 2012018,00016,00014,00012,0006,0002,0004,00010,0008,000History and philosophicalstudiesMass communicationsand documentationLinguistics, classicsand relatedArchitecture, building and planning European languages,literature and relatedTechnologies Non-European languages,literature and relatedEducationAcceptancesApplications-40% -30% -20% -10% 0% 20%10% 30%0 100,000 200,000 300,000 400,000 600,000500,000 700,000Subjects alliedto medicineBiological sciencesMathematical andcomputer sciencesEngineeringPhysical sciencesSciences combined withsocial sciences or artsMedicine dentistryCombined sciencesArchitecture, buildingand planningVeterinary science,agriculture relatedTechnologiesPercentage change 2010–2011 Percentage change 2011–2012Choices 2012 Percentage change 2009–2010
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 19Figure 2.19: 2012 UK-domiciled acceptances and percentage changes in UK-domiciled acceptances from2009 to 2012 for science-related subjects-40% -30% -20% -10% 0% 10%0 10,000 20,000 30,000 50,00040,000 90,00080,00070,00060,000 100,000Subjects alliedto medicineBiological sciencesMathematical andcomputer sciencesEngineeringPhysical sciencesSciences combined withsocial sciences or artsMedicine and dentistryCombined sciencesArchitecture, buildingand planningVeterinary science,agriculture and relatedTechnologiesAcceptances 2012 Percentage change 2010–2011 Percentage change 2011–2012Percentage change 2009–2010Source: UCASFigure 2.20: 2012 UK-domiciled applications (choices) and percentage changes in UK-domiciledapplications from 2009 to 2012 for humanities-related subjects-40% -30% -20% -10% 0% 10% 20%0 100,000 200,000 300,000 400,000 500,000 600,000Non-European languages,literature and relatedEuropean languages,literature and relatedCombined social sciencesSocial sciencescombined with artsMass communicationsand documentationCombined artsLinguistics, classicsand relatedHistory andphilosophical studiesEducationLawSocial studiesCreative arts and designBusiness and adminstudiesChoices 2012 Percentage change 2010–2011 Percentage change 2011–2012Percentage change 2009–2010Source: UCAS
20The funding environment for universities: an assessmentFigure 2.21: 2012 UK-domiciled acceptances and percentage changes in UK-domiciled acceptances from2009 to 2012 for humanities-related subjects0 10,000 20,000 30,000 50,00040,000 90,00080,00070,00060,000 100,000-40% -30% -20% -10% 0% 10%Acceptances 2012 Percentage change 2010–2011 Percentage change 2011–2012Percentage change 2009–2010Non-European languages,literature and relatedEuropean languages,literature and relatedCombined social sciencesSocial sciencescombined with artsMass communicationsand documentationCombined artsLinguistics, classicsand relatedHistory andphilosophical studiesEducationLawSocial studiesCreative arts and designBusiness and adminstudiesSource: UCAS2.5 Outcomes for institutions in Englandfor 2012–13Section 2.4 gave an overview of outcomes for variousUK- and EU-domiciled groups applying and thoseaccepted into higher education for 2012–13 forall UK higher education institutions. This sectionexamines the outcomes for publicly funded providersof higher education in England.In 2012–13 student number control arrangementsbroadly covered full-time UK and EU undergraduateentrants to higher education at higher educationinstitutions and further education colleges in England.This includes two groups of students, the first ofwhich are students who fall within the populationwhere a maximum control limit (‘the student numbercontrol’) on recruitment for each institution is applied.The second group are students who fall outside theselimits (‘the deregulated student population’).Section 2.5.1 covers the changes to student numbercontrols that institutions were faced with duringthe 2012–13 recruitment cycle, including estimatesof deregulated populations. Section 2.5.2 and 2.5.3cover actual outcomes of the 2012 admissions cycleand the impact on institutions.2.5.1 Projected impact of changes in studentnumber controls across institutionsThe government’s Higher Education White Papersignalled two major changes in relation to studentnumber controls, the first being that controls wereto be removed for those students with entry gradesequivalent to AAB or above at A-level. Additionally,a ‘margin’ of places was to be created, reallocated onthe basis of ‘cost and quality’. With these changes thegovernment aimed to increase competition betweenproviders, and in turn produce a system that wasmore responsive to student demand. This sectionillustrates the changes to controls that institutionswere faced with during the 2012 admissions cycle.Figure 2.22a shows the projected impact oninstitutions funded by the Higher Education FundingCouncil for England (HEFCE) of the deregulationof controls for students entering with gradesequivalent to AAB or above in 2012–13. The figureshows HEFCE’s estimates of the AAB populationfor individual institutions in 2012–13 as announcedin March 2012.5The anticipated mean level ofderegulation at higher education institutions in 2012–13 was around 23% of an institution’s total studentpopulation, although this varies significantly, as thefigure shows, with some institutions anticipated toexperience deregulation of over 80% of their places.5. HEFCE (2012) Annual funding allocations 2012–13
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 21Figures 2.22a, 2.22b and 2.22c: Impact of liberalisation of student number controls on providers of highereducation in England, 2012–13Based on projections (not actual outcomes) of the AAB+ population in 2012–13.Source: HEFCEHigher educationinstitutionsFurther educationcollegesNumber of places awarded from marginNumber ofhighereducationinstitutionsNumber offurthereducationcolleges2.22b: Distribution of places awarded from margin2.22a: Distribution of institutions by proportion of students who are AAB+ or equivalentProportion of students who are AAB+ or equivalentShaded area represents +/- 1standard deviation from mean2.22c: Total number of places allocatedthrough the margin02,00012,0008,0004,0006,00010,000100Awardofplacesthroughmargin80604020907050301000–5051–100101–150151–200201–250251–300301–350351–400401–450501–550551+1008060040209070503010HighereducationinstitutionsFurthereducationcolleges0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%23%
22The funding environment for universities: an assessmentFigure 2.23: Distribution of implied numbers across all publicly funded institutions providing highereducation in England for 2012–1380%100%70%60%90%30%20%50%10%0%40%Estimated proportion of students no longer subjectto the student number controlOther core numbersPlaces awarded through marginPercentageoftotalplacesBased on projections (not actual outcomes) of the AAB+ population in 2012–13.Source: HEFCEThe anticipated average level of deregulation at furthereducation colleges was significantly lower at 2%.Figure 2.22b shows the impact of the core andmargin policy, with the distribution of places awardedthrough the margin for 2012–13. The reallocationof 20,000 places, taken pro-rata from all HEFCE-funded institutions, resulted in 51.8% being allocatedto further education colleges and 48.2% to highereducation institutions, a net loss of 9,370 placesto higher education institutions in 2012–13. Althoughfurther education colleges received a larger numberof places overall, these were allocated to 155providers compared to the 35 higher educationinstitutions that received the remaining 9,640margin places.Figure 2.23 shows the combined impact of boththe projected deregulation of AAB+ students andthe outcomes of the core and margin policy on thecomposition of implied student numbers for highereducation institutions and further education collegesin 2012–13. Implied student numbers provide anotional figure for comparison with the previousyear on the basis that each institution is able tomaintain its share of AAB+ equivalent and medicalor dental students in 2012–13. The expected levelof deregulation and allocation of margin places canbe seen to vary across the sector, with three maingroups emerging:1. Providers where a significant proportionof places, 40% or more, were deregulatedthrough the AAB+ policy2. Providers who were awarded places through themargin and also saw deregulation of numbers3. Sixty-five further education colleges thatentered the higher education sector for thefirst time through the award of margin placesFigure 2.24 shows how the projected impacts ofderegulation varied across institutions according totheir proportion of students who are AAB+. Whileimplied figures based on projections suggested thatsome institutions could increase student numbers,the majority would have anticipated contractions.This may have affected institutions’ strategiesduring the 2012 admissions cycle.
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 23Figure 2.24: Projected impact of supply-side reforms on higher education institutions in England in 2012–13Universities UK carried out interviews witha sample of vice-chancellors about theirpreparations for the 2012 cycle. While preparationsvaried, common themes emerged, including:• Institutions developing a heightened sense ofthe provision they are offering and their shareof the market. Some institutions carried outinternal reviews of their provision with a view tobetter understanding their relative position inthe market, and to better understand the needsof the student population they attract.• A greater focus on student-facing elements ofthe recruitment process, including developingunique selling points and communicating thesevia marketing efforts, from targeting schoolsand maximising the impact of open days, towider advertising campaigns.• Examining in detail the qualifications of theexisting student population and revisiting offer-making strategies for 2012 to adjust to changesin deregulation. Some institutions introducedgreater coordination of offer-making strategiesacross the institution, and looked to improve thespeed with which offers were made. Related tothis, some institutions reported the importanceof tracking student numbers in real time, andthe associated need to develop sophisticatedmonitoring systems.• Introduction of financial incentives to attractvarious segments of the market. Otherinstitutions felt that additional inducements werenot necessary.• An acute awareness of the risks of over-recruitment. Strategies were developed tomitigate these risks, including predicting whereunexpected increases in numbers might ariseand implementing plans to deal with the sourcesof these increases.2.5.2 Outcomes of the 2012 admissions cycleon the AAB+ population2012–13 saw a 48,500 reduction in acceptancesfor applicants equivalent to those covered bystudent number control arrangements, includingAAB+ and non AAB+ students, for entry in Englandin 2012.6This represents a 14% fall from 2011–12.Figures released by HEFCE in March 2013 showa slightly smaller decline of 12% for the numberof entrants who are subject to student numbercontrol arrangements (including those in thederegulated population) in 2012–13 from 2011–12.7Figure 2.25 demonstrates the impact of deferralbehaviour on overall UK and EU acceptances, andclearly shows that changes in deferral behaviourin 2011 have meant that rises and falls inacceptances in 2011 and 2012 by UCAS cycle yearare even more pronounced when viewed by entryyear. Smaller changes in acceptances for bothyear of entry and UCAS cycle year are seen whencomparing 2012 to 2010.6. UCAS (2013) 2012 End of cycle assessment of UCAS acceptances by intended entry year, country of institution and qualifications held7. HEFCE (2013) Higher education in England: Impact of the 2012 reforms10%-10%-20%0%20%30%40%Changein‘implied’SNCpriorto2012recruitmentcycle£6,000 £9,000Average fee after waivers= 0 = 200 = 400 = 569Award of places through marginProportion of students who are AAB+ equivalent0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Based on projections (not actual outcomes) of the AAB+ population in 2012–13.Source: HEFCE
24The funding environment for universities: an assessment8. UCAS (2013) 2012 End of cycle assessment of UCAS acceptances by intended entry year, country of institution and qualifications held9. HEFCE (2013) Higher education in England: Impact of the 2012 reforms10. UCAS (2013) 2012 End of cycle assessment of UCAS acceptances by intended entry year, country of institution and qualifications heldFigure 2.25: UK and EU acceptances to UCASinstitutions in England, by entry and UCAS cycleyear, 2009–12820102009 2011 2012Total by year of entry340,000350,000400,000Acceptances380,000360,000370,000390,000Total by UCAS cycle yearSource: UCASThe reduction of 48,500 consists of a fall of 13,400in AAB+ students (-14%) and a fall of 35,100 innon AAB+ students (-13%). Although the numberof acceptances by all AAB+ students fell by 14%in 2012–13, actual levels remain broadly around2010–11 levels, as 2011–12 saw a record numberof acceptances in the AAB+ group. The two-yearaverage remains broadly in line with historictrends, and close to the 85,000 projected by HEFCEfor 2012–13. HEFCE has noted that the overallnumber of AAB+ entrants in 2012–13 was 5,000below its initial estimate of 85,000, with a decreaseof 4,000 appearing to be the result of fewerdeferrals from the previous application cycle.9Looking just at acceptances by AAB+ students,the percentage fall was greater for those whoachieved AAB+ through A-levels (17%) thanfor those who achieved AAB+ through otherqualifications (10%).The proportion of AAB+students with A-levels decreased from around66% for those entering in 2011–12 to 64% in 2012–13. Table 2.5 provides further details of acceptancesrelated to entry in 2012.Table 2.5: UK and EU acceptances, related to HEFCE student number control population, to UCAS memberinstitutions in England by student number control group and year of entry, 2009–10 to 2012–1310SNC group 2009–10 2010–11 2011–12 2012–13AAB+ Acceptances 70,222 80,946 92,909 79,480Difference 10,724 11,963 -13,429% difference 15% 15% -14%AAB+ GCEA-levelAcceptances 48,730 55,138 61,460 51,204Difference 6,408 6,322 -10,256% difference 13% 11% -17%AAB+ otherqualificationsAcceptances 21,492 25,808 31,449 28,276Difference 4,316 5,641 -3,173% difference 20% 22% -10%Not AAB Acceptances 258,446 252,746 262,609 227,494Difference -5,700 9,863 -35,115% difference -2% 4% -13%Total Acceptances 328,668 333,692 355,518 306,974Difference 5,024 21,826 -48,544% difference 2% 7% -14%Source: UCAS
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 2511. UCAS (2012) End of cycle reportThe 2011–12 16 to 18-year-old A-level cohortrepresents those applying for higher education inthe 2012 cycle, and therefore gives a good indicationof any changes in supply of AAB+ students for2012–13. As noted earlier, A-level AAB+ acceptancesaccounted for around 64% of all AAB+ acceptancesentering higher education in 2012–13.Table 2.6 shows the change in achievement for 16 to18-year-old A-level AAB+ students in England between2010–11 and 2011–12. The number of studentsachieving AAB+ in 2011–12 remained more or less flat(0.8% increase) between the two years, suggesting thatthe supply of recently qualified AAB+ students did notchange significantly. As described earlier, however, thechange in deferral behaviour for all applicants in 2011did impact on acceptances for entry in 2012–13.Table 2.6: A-level achievement at AAB or above:students in England aged 16 to 18, 2010–11 and2011–12Year Total enteredfor A-levels% achievingAAB or aboveNumberachievingAAB or above2010–11 258,890 20.4% 52,8152011–12 266,220 20.0% 53,245Source: HEFCE and Department for EducationIn addition to absolute numbers of AAB+ acceptances,two additional measures – the acceptance rate andentry rate of AAB+ students – also demonstrate thechanges seen for this cohort in 2012.Figure 2.26a compares the acceptance rate, theproportion of those applying who subsequentlyaccept a place for entry, of three groups of English18-year-olds: those accepted with A-level AAB+, thoseaccepted with BTEC AAB+ qualifications and thosewithout AAB+ qualifications. The acceptance rate forA-level AAB+ applicants is significantly higher than thatfor those applicants holding BTEC AAB+ qualificationsor no AAB+ qualifications at all. Both AAB+ groupsshow a marginal decrease for 2012, after increases in2011, with the acceptance rate for those without AAB+qualifications increasing slightly over the same period.The entry rate, or proportion of the population whoenter higher education, of English 18-year-olds byqualification group is shown in Figure 2.26b. 2012saw a slight decrease in the proportion of English18-year-olds entering with AAB+ and non-AAB+qualifications but entry rates remain broadly inline with previous years.Figure 2.26a: Acceptance rate for English 18-year-olds by type of qualification held, 2008–12112008 20102009 2011 201270%95%80%75%90%85%AAB+ A-levels AAB+ BTEC Not AAB+AcceptancerateFigure 2.26b: Entry rates for English 18-year-oldsby entry qualification group, 2008–122008 20102009 2011 20120%25%10%5%20%15%Not AAB+ AAB+EntryrateSource: UCAS
26The funding environment for universities: an assessmentThe 2012 recruitment cycle saw a slight increase inthe proportion of applicants predicted AAB+, but thisrepresented no significant change in the predictionbehaviour from past trends.2.5.3 Outcomes of the 2012 admissions cyclefor institutionsIt is important to note that the final impact ofthe 2012–13 admissions cycle on enrolments toinstitutions will not be known until early 2014 whendata from the Higher Education Statistics Agencyfor academic year 2012–13 is released. This sectionuses publicly available interim data on entrants tohigher education in 2012–13 collected by HEFCE toassess potential outcomes.A number of factors have led to greater volatility indemand for 2012–13, including changes to studentapplication behaviour and the impact of demographicchanges on the size of applicant cohorts. Changes tostudent behaviour also seem to differ according tothe population in question, with deferral behaviourhaving a large impact on the number of youngstudents available for entry in 2012–13 and otherfactors resulting in significant reductions in demandfrom mature students compared to recent trends.Figure 2.27 summarises the change in entrantsbetween 2011 and 2012 cycle years. The medianchange in entrants was -13% for higher educationinstitutions and -0.5% for further education colleges.Although further education colleges, on average,saw a smaller decrease in entrants, the level ofvariation differed significantly between the twogroups, with 30 further education colleges reportinga decrease in entrants greater than 13%.Figure 2.28 shows the change in entrants subjectto student number control arrangements (includingthose in the deregulated population) for highereducation institutions in 2012 cycle year by the levelof deregulation of student numbers. Figure 2.24,showing the change in implied student numbercontrols for institutions based on projections of theAAB+ population in 2012–13, is reproduced as partof Figure 2.28 for ease of comparison. Figure 2.28,in essence, shows implied changes if institutionsmaintained recruitment at previous levels, alongsidethe actual outcomes relating to changes in entrants.Figure 2.28 shows a wide variation in outcomes atan institutional level, with the majority of institutionsshowing decreases in entrants that are subject tostudent number control arrangements in 2012–13.A number of institutions showed an increase inentrants over the same period; these were notFigure 2.27: Summary of change in full-time undergraduate entrants between 2011 and 2012 for providersof higher education in England, by provider type-0.5% Median=20 =2,000 =4,000 =6,000 =8,000Number of UK and EU entrants in 2012–13HighereducationinstitutionFurthereducationinstitution-13.0% Median-100% 180%160%140%120%100%80%60%40%20%0%-20%-40%-60%-80%Change in UK/EU entrants 2011 to 2012Note: Excludes outliers that are +/- 2 standard deviations from population mean for each provider typeSource: HEFCE
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 2712. HEFCE (2013) Higher education in England: Impact of the 2012 reformsFigure 2.28: Change in implied student numbercontrols and change in entrants at higher educationinstitutions in England for 2012 recruitment cycleChangeinrecruitmentaccordingtoSNCpopulation(exemptandnotexempt)10%-10%-20%0%20%30%40%Proportion of students who are AAB+ equivalentProportion of students who are AAB+ equivalentChangein‘implied’SNCpriorto2012recruitmentcycle£6,000 £9,000Average fee after waivers= 0 = 200 = 400 = 569Award of places through margin10%-10%-20%0%20%30%40%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Based on projections (not actual outcomes) of the AAB+ populationin 2012–13.Source: HEFCEconfined to any particular type of institution. Onaverage, institutions in the lowest quartile ofderegulation showed the greatest proportionaldecrease in entrants and those in the highestquartile the lowest proportional decrease. This,however, varied significantly, with institutions inall quartiles of deregulation experiencing bothincreases and decreases. HEFCE notes in its 2013report on the impact of the reforms that overallrecruitment in 2012–13 fell below planned numbersby around 28,000 places, or 9%.Some of the greater-than-expected reduction inentrants may reflect restrictions on over- andunder-recruitment in 2012–13 and the impact thatthese may have had on institutional behaviour.Early announcements suggested that for 2012–13any institution recruiting below 95% of its studentnumber control limit was likely to face a downwardadjustment to its control limit in 2013–14. Thiswas subsequently reassessed by HEFCE andnot implemented for 2012–13 due to the factorsmentioned in this section and the variations inrecruitment highlighted in Figure 2.28.The secretary of state’s grant letter to HEFCE inJanuary 2012 did not give a figure for penaltiesrelated to over-recruitment in 2012–13. It did,however, outline that grant adjustments wouldincrease significantly compared to those in previousyears. This, along with a reduced student numbercontrol limit (to account for the removal of 5,000places to align control limits with government plansand the transfer of 10,000 places to further educationcolleges as part of the margin exercise), may haveinfluenced institutional recruitment strategies.HEFCE has noted that around 26% of highereducation institutions filled all of their marginplaces, with 20% filling none. 26% of furthereducation colleges filled all of their margin places,with 17% filling none.12While Figure 2.28 shows the change in entrantsby the level of deregulation of student numbers,it is also informative to consider how changes inentrants have been distributed across institutionsaccording to other characteristics. Figure 2.29demonstrates the change in entrants at highereducation institutions by selected measuresincluding employment outcomes for graduates,student satisfaction and fee level. There aresome indications that those institutions with highemployment rates tended to have larger increasesin entrants compared to those with very low rates.However, there does not seem to be any patternemerging in response to variation in fees acrossthe sector.
28The funding environment for universities: an assessmentFigure 2.29: Change in entrants at higher education institutions in England by selected measuresChangein‘implied’SNCChangeinrecruitmentbetween2011–12and2012–13Proportion of studentswho are AAB+equivalent*% in employment or study6 months after graduation(first degrees)Satisfied with overallprovision (NSS) %Average fee after waivers50% 80 85 90 95 100 75 80 85 900% £7,000 £8,000 £9,000-20%0%-40%20%-40%-20%0%20%*Based on projections (not actual outcomes) of the AAB+ population in 2012–13.Source: HEFCE, HESA, National Student Survey, and Office for Fair Access2.6 Factors driving outcomes of the2012 admissions cycle for studentsand institutionsThis section summarises the main factorscontributing to the fall in the numbers of studentsaccepted for entry in 2012 across the UK, buildingon the analysis in sections 2.4 and 2.5. Factorsmentioned in earlier sections include:–– Changes in the behaviour of those applying inrelation to deferral of entry–– Changes in the behaviour of mature students–– Changes to institutional behaviour arising frompolicy changes to student number controlsSection 2.5.2 showed that for institutions in England,a significant factor underpinning changes in thenumber of students entering in 2012–13 comparedwith 2011–12 was a change in applicant behaviourin relation to deferrals. For English institutions in2010 around 23,600 students chose to delay theirentry until 2011–12, but in 2011, less than half thisnumber chose to delay their entry until 2012–13.This contributed to a more pronounced fall in thenumber of students entering English institutions in2012–13. There are early indications that the numberchoosing to defer entry to 2013–14 is returning tomore typical levels (of around 20,000). Therefore theimpact of deferral behaviour of applicants is likely tobe only a temporary factor causing changes to thepattern of entry in 2011–12 and 2012–13.Section 2.4.2 discussed the behaviour of maturestudents in relation to applying for, and accepting,entry into higher education. There has been afall in the number of mature applicants applyingto higher education since 2010, and this fall wasmore pronounced in 2012 at 9.2%, a fall of 17,520applicants from the previous year. It is unclearwhether this is a temporary factor, or a morepermanent trend which may continue into the2013 cycle and beyond.Section 2.5.3 examined how the restrictive natureof student number controls in 2012–13 may havehad an impact on institutional recruitment strategies,leading in part to the fall in acceptances. There isevidence to suggest that in 2012, institutions madea smaller number of offers in a more selectivemanner, to a smaller cohort of applicants. Feweroffers of places were made to UK and EU applicantswho selected five choices, reflecting the decrease
The market for UK- and EU-domiciled undergraduate studentsIN FOCUS 29in applicants in that year. However, the numberof applicants receiving five offers increased – theonly group to do so – suggesting a concentrationof offers on specific candidates. This may reflectcompetition for applicants with entry qualificationsthat place them in the deregulated pool, or increasedcompetition between providers. As the number ofacceptances per offer for institutions did not changein 2012–13, the impact of concentrating offers on asmaller population of students is estimated by UCASto have led to 26,000 fewer acceptances in 2012.As a result, some institutions may have recruitedfewer AAB+ students than anticipated, and wereunable to lower the threshold for entry in responseas they may have in the past. The small bandwhich institutions could aim for, given the prospectof penalties for over-recruitment and loss ofplaces for under-recruitment, may have led to amore guarded and less responsive approach torecruitment than anticipated.The government has introduced significantly moreflexibility around institutional student numbercontrols for 2013–14, with 3% flexibility above totalrecruitment in 2012–13, along with clarificationof penalties for over-recruitment in 2012–13.The government has also confirmed the move toderegulation of student numbers for those withentry grades equivalent to ABB or above at A-levelfor 2013–14. The 5,000 places used to create themargin in 2013–14 will not be removed from the corenumbers of all institutions. These measures couldhelp institutions with their recruitment strategiesand for the supply of places to better match thedemand from students in 2013–14.Universities UK has carried out interviews witha sample of vice-chancellors on the outcomesof the 2012 recruitment cycle. Common themesemerged, with institutions reporting:• The 2012–13 recruitment cycle gave thema clearer indication of their market positionwithin the higher education market, and whotheir main competitors are• The importance of HEFCE recognising theunique nature of specialist institutions andexempting them from the majority of studentnumber control policy changes• Concerns related to the restrictivenessof student number control limitsLooking ahead to the 2013 cycle, UniversitiesUK has carried out interviews with a sampleof vice-chancellors about their preparationsso far. While a wide range of experiences werereported, common themes emerged, including:• Institutions following through on the resultsof internal reviews and market researchto develop their offer and ensure it iscompetitive• Continued marketing drives andconsideration of financial incentives to targetparticular segments of students• Anticipation that competition will be muchsharper this year to attract students. Themove to deregulation of ABB+ equivalentstudents is not expected to create majorchanges for some institutions, whereasfor others it has meant developing a morein-depth understanding of the interactionbetween their student number controlledplaces and deregulated numbers• A perception that demand patterns are notoverly responsive to changes in fee levels,with other factors (such as employability,location and course offerings) being muchmore important• Continued concerns about over-recruitment,though the additional flexibility on studentnumber controls has been welcomed
Chapter 3:THE MARKET FOR UK- AND EU-DOMICILEDpostGRADUATE STUDENTS
The market for UK- and EU-domiciled postgraduate studentsIN FOCUS 313.1 Scope of this chapterThis chapter examines outcomes for UK- and EU-domiciled postgraduate students, with a focus onoutcomes leading up to 2012–13. It covers all UK-and EU-domiciled postgraduate students studying atall UK institutions.3.2 Overview of funding arrangementsand availability of dataChanges to the funding arrangements for highereducation outlined in chapter 2 will create changeacross the breadth of the UK’s teaching activities,including postgraduate study. While funding changesthat directly affect postgraduate study in 2011 havebeen on a much smaller scale than those affectingundergraduate study, there are concerns that theindirect effects of the reforms to undergraduatestudy on postgraduate study may be significant.3.2.1 Funding sources for postgraduate studentsThere is no generic student support packagefor postgraduate study comparable to that forundergraduate study. Students undertakingpostgraduate study pay tuition fees up front and areunable to access financial support in a consistentway to cover the cost of tuition fees. Relatively littleinformation is available about the way in whichtaught postgraduate students finance their studies.Whilst anecdotal evidence suggests that tuition feesare met primarily by the students themselves, thereare also increasing instances of employers making acontribution towards fees.The only mainstream source of funding availableto postgraduate students in England is via theProfessional and Career Development Loans (PCDLs).A PCDL can be used to fund courses that enhancejob skills and career prospects and may be used tocover fees, course costs and other living costs. Loanamounts can be up to £10,000 but the terms differfrom a tuition fee loan at undergraduate level in that itis a commercial loan offered by a high street bank andas such attracts a commercial rate of interest. Duringthe period of study the interest payment is made bythe UK government but subsequently the loan must berepaid in the same way as any other commercial loan.Table 3.1 provides a summary of the number andaverage value of PCDLs made over the past threeyears.13Scottish students are able to access funding for somedesignated courses, predominantly those at diplomalevel. This funding is made available in the form of aloan from the Scottish government which is repaidon an income contingent basis in the same way asundergraduate loans are repaid.Research councils have traditionally providedfunding for postgraduate research (PGR) studentsthrough studentships, which provide successfulapplicants with a stipend to cover living costs aswell as funding to cover the tuition fee. However,they have recently moved to a new model of fundingfor PGR students based on establishing doctoraltraining centres. These centres enable cohorts ofPhD students to undertake a programme of trainingoften in a multi-disciplinary environment, thussignifying a shift away from the ‘lone scholar’ modelthat has long prevailed in doctoral training.3.2.2 Funding sources for institutionsIncome to institutions in England to supportpostgraduate taught (PGT) provision comes primarilyfrom tuition fee income and teaching grants allocatedby the Higher Education Funding Council for England(HEFCE). Most PGT tuition fees are unregulated andas such institutions are free to set their own fee levelsin line with market rates. HEFCE funding is allocated13. Department for Business, Innovation and SkillsTable 3.1: Professional and Career Development Loans, 2009–10 to 2011–122009–10 FY 2010–11 FY 2011–12 FYTotal number of PCDLapplications*20,600 19,200 22,700Total number of PCDLsoffered (and taken up)12,239 (8,320) 8,333 (7,679) (8,900*)Approximate numberof PCDLs taken up forpostgraduate study*6,400 5,700 6,200Average loan value* £6,700 £7,000 £7,500Source: BISFY: Financial Year*rounded to nearest hundred
32The funding environment for universities: an assessmenton the basis of price groups which are determined bythe average cost of teaching provision in particularsubject areas. As part of the teaching funding reformspublished in 2011, HEFCE announced that it would bewithdrawing funding for all PGT students other thanthose in the highest cost subject areas. This wouldhave reduced the volume of PGT provision receivingHEFCE funding from 60% to just 17%. In January2012 HEFCE announced that it would reinstatefunding for PGT students in all but the lowest costsubjects. The additional allocation of £1,100 perPGT student in price bands A, B and C will providea short-term solution to sustainability of provisionbut consideration will need to be given as to theappropriate level of public funding in the future andthe method by which this is allocated. The total costof this interim allocation is expected to be around £39million in 2012–13.In Wales the Higher Education Funding Councilfor Wales provides direct grants to institutions forpostgraduate provision based on the number ofcredits taught at a rate determined by the academicsubject category. This is supplemented by per capitafunding at the rate of £100 per student. Unlikefull-time undergraduate provision, postgraduateprovision does not qualify for premium fundingfor high cost or priority subjects. A premium fordisabled postgraduate students and for creditstaught through the medium of Welsh is provided.In February 2013, the Scottish Funding Councilannounced that it would be funding an additional850 PGT places across 18 Scottish institutions. Theadditional places will focus on courses that supportindustry and total funding will amount to £6.2 millionin 2013–14.Funding to support the provision of PGR is arguablymore complex than for PGT. In England, the mainsources of funding to support doctoral training areHEFCE, Research Councils UK and tuition fees.HEFCE provides funding through its research degreeprogramme (RDP) supervision funding. This is aformulaic allocation made to institutions on the basisof the number of PhD students and the quality ofresearch activity in individual academic departments,determined by 2008 Research Assessment Exerciseoutcomes. From 2012–13 the HEFCE allocationto institutions to support the delivery of doctoralprogrammes increased by £35 million to £240 millionper annum. The allocation method for this fundingprior to 2012–13 did not take into account the qualityprofiles of departments and used a minimum qualitythreshold to determine eligibility. The inclusion of aquality weighting is intended to allocate funding moreselectively on the basis of quality.3.2.3 Availability of dataAs set out in section 2.3, there is a substantial lagbetween publicly available data and the outcomesfor 2012–13 entry, with final data on the number ofstudents enrolling in university not being availableuntil early 2014. In addition, those undergraduatesentering in 2012–13 are not likely to progress on topostgraduate study until 2015–16 at the earliest. Assuch, the impact of the reforms to undergraduatestudy in 2012–13 on the postgraduate cohort are notlikely to be felt until 2015–16 (Table 3.2).Therefore the remainder of this chapter exploresrecent trends in postgraduate study in the run-upto 2012–13, with a particular focus on the availableenrolment data up to 2011–12.Table 3.2: Timescales of outcomes and evidence for recruitment of postgraduate studentsYearAnnouncements and actions relating to postgraduaterecruitment Evidence of outcomes (source)2006 Entry of first undergraduate cohort paying variable tuition fees 2009 First graduating cohort from variable tuition fee regime firstopportunity for this cohort to apply for PG study2011 Student data published revealingenrolments for PG study in 2009–10 (HESA)2012 Entry of first undergraduate cohort paying up to £9ktuition fees 2015 First graduating cohort from £9k fee regime firstopportunity for this cohort to apply for PG study2017 Student data published revealingenrolments for PG study in 2015–16 (HESA)
The market for UK- and EU-domiciled postgraduate studentsIN FOCUS 333.3 Outcomes for UK- and EU-domiciledpostgraduate students in the run-up to2012–133.3.1 Trends in taught postgraduatesThere are currently 459,440 students registeredon PGT programmes in UK higher educationinstitutions. The end of the last decade saw aslowing in the growth in PGT recruitment thathad been evident at the turn of the century. Whilstdomestic recruitment had already begun to slow,this was masked by the considerable growth ininternational students (Table 3.3).The PGT population is incredibly diverse andis markedly different from the undergraduatepopulation in that around 50% of all PGT studentsstudy part time and around 66% are over the ageof 25 (Figure 3.1). Motivations for undertakingpostgraduate study are similarly diverse andflexibility of provision is increasingly important. In2011–12, 13% of all registered PGT students werestudying via distance learning.Over the past decade the number of PGT studentsin the UK has grown significantly: around 25%since 2002. This growth has largely been drivenby increased numbers of non-EU students. Non-EU student numbers have increased by 98% since2002–03 compared with just a 7% increase in homeand EU students over the same period. This hasresulted in the proportion of non-EU postgraduatestudents increasing (Figure 3.2).Figure 3.1: Composition of taught postgraduatestudents by age and mode of study, 2011–12Part timeFull time0100%40%10%20%30%50%70%80%90%60%Under 24 25–29 30 and overPercentageoftotalnumberSource: HESATable 3.3: Total number of taught postgraduate students, 2007–08 to 2011–122007–08 2008–09 2009–10 2010–11 2011–12 % change between2007–08 and 2011–12Full-time 181,980 200,885 227,770 235,235 230,445 27%Part-time 225,590 241,235 252,025 249,630 228,995 2%UK 280,195 299,270 317,005 313,935 294,295 5%EU 29,540 31,610 34,625 36,270 35,405 20%Non-EU-EU 97,835 111,240 128,165 134,660 129,740 33%Total 407,570 442,120 479,795 484,865 459,440 13%2007–082008–092009–102010–112011–120 100,000 200,000 300,000 400,000 500,000Source: HESA
34The funding environment for universities: an assessmentFigure 3.2: Taught postgraduate students by domicile, 2011–120% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%2002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Percentage of total numberDomicileUKOther EUNon EUSource: HESAHowever, 2011–12 Higher Education StatisticsAgency (HESA) data suggests that this trend is alsochanging, with – for the first time – a fall in PGTstudent numbers for students from all domiciles.Whilst most institutions have experienced areduction in PGT student enrolments in some orall of these categories, some have seen largerreductions than others. Recent data publishedby HEFCE suggests that whilst the level of newentrants to full-time PGT study has remained steadyover the past three years, new entrants to part-timestudy have fallen by around 27% over the sameperiod. This may, to some extent, reflect the currenteconomic climate and changes in the labour marketbut it will be important to monitor this carefully inthe future to ensure that any underlying issues andtrends are identified.In terms of subject of study, over 60% of all PGTstudents are registered on courses in just fourmain subject areas: business and administrativestudies, education, subjects allied to medicine,and social studies (Figure 3.3). However, when thisis broken down by domicile it becomes clear thatsome subject areas are heavily reliant on non-EUstudents. Around 50% of students are from outsidethe EU in each of business and administrativestudies, mathematical and computer sciences, andengineering and technology. In comparison, only 6%of students in education, 10% in subjects allied tomedicine, and 14% in biological sciences are fromoutside the EU.The distribution of PGT across the sector is alsovariable, with just 10 institutions recruiting almost20% of total PGT numbers (Figure 3.4). For eightinstitutions, PGT students make up more than 50%of their total student populations.Universities UK has carried out interviews with asample of vice-chancellors about the outcomes of2012–13 entry for PGT students. There were manycommon experiences arising from the interviews:• Almost all institutions experienced generalfalls in UK-domiciled PGT students. However,demand from UK-domiciled students for somesubjects remained strong, though these subjectsvaried according to the institution surveyed.• There was general recognition that increases ininternational PGT students had compensated forrecent falls in UK-domiciled PGT students.• The fall in UK-domiciled students was part ofa longer-term trend but was also attributed tothe economic downturn. The higher educationreforms were not currently seen as being amain factor behind falls.• Many institutions were conscious of the needto be more innovative in the provision of PGTcourses, to remain competitive domesticallyand internationally. Institutions are lookinginto the options around distance learning andmore flexible provision in order to grow theirmarket share.
The market for UK- and EU-domiciled postgraduate studentsIN FOCUS 35Figure 3.3: Taught postgraduate students by subject of study, 2011–120 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 110,000100,000Domicile UK Other EU Non EUPhysical sciencesVeterinary scienceMass communication and documentationHistorical and philosophical studiesLanguagesMedicine and dentistryArchitecture, building and planningMathematical and computer sciencesSubjects allied to medicineEducationLawEngineering and technologySocial studiesCreative arts and designBiological sciencesBusiness and admin studiesNumber of studentsFigure 3.5: Total number of postgraduate research students, 2007–08 to 2011–122007–08 2008–09 2009–10 2010–11 2011–12DomicileNon EUEUUKNumberofstudents120,000100,00080,00060,00040,00020,0000Source: HESAFigure 3.4: Number of taught postgraduate students by institution, 2011–1212,00010,0008,0006,0004,0002,0000NumberofstudentsInstitutionSource: HESASource: HESA
36The funding environment for universities: an assessment3.3.2 Trends in research postgraduatesThe supply of high quality doctoral students isfundamental to sustaining the UK research base.Doctoral study is important not only for trainingthe next generation of academic staff but also inproviding highly skilled researchers to a range ofemployment sectors. The total number of doctoralstudents studying at UK institutions has remainedrelatively stable over the past five years, albeit witha small increase in the number of entrants over thepast two years (Figure 3.5). In 2011–12 the number ofstudents in the first year of a doctorate programmewas 34,780, an increase of 5% since 2009–10.As noted in section 3.2.1, research councils havetraditionally provided funding for PGR studentsthrough studentships, which would providesuccessful applicants with a stipend to cover livingcosts as well as funding to cover the tuition fee.Figure 3.6 shows how the number of PhD studentsfunded in this way varies by research council, withthe Engineering and Physical Sciences ResearchCouncil funding more than 40% of the total numberof PhD students supported in 2010–11. Recent datasuggests that the number of PhD starters funded bythe research councils has fallen by around 6% peryear, from 6,200 in 2009 to 5,200 in 2012.14The reportby the Department for Business, Innovation andSkills on this data suggests that this is as a result ofthe ‘concentration of scarce resources among thebrightest and the best.’15As with PGT students, the distribution of PGRstudents across the sector is also variable. A higherdegree of concentration occurs at PGR level withjust 10 institutions recruiting a third of total PGRnumbers (Figure 3.7).Figure 3.6: Number of PhD students supported by research council funding, 2008–09 to 2011–12MRC ESRC AHRCEPSRC NERC STFC BBSRC2008–0903,5001,5001,0005002,5003,0002,0002009–102010–112011–12NumberofstudentsData for all years not available for all research councils.Source: research councilsFigure 3.7: Number of postgraduate research students by institution, 2011–126,000NumberofstudentsInstitution5,0004,0003,0002,0001,0000Source: HESA14. BIS (2013) Research Councils Impact Reports 201215. Ibid
The market for UK- and EU-domiciled postgraduate studentsIN FOCUS 37There are a number of doctoral qualifications offeredby UK universities; the most common researchdegree in the UK is the doctor of philosophy,awarded on the basis of an extended researchproject. Other doctorates offered by UK universitiesinclude professional doctorates, PhD by practice,integrated or ‘new route’ doctorates and PhD bypublication. The fastest growing of these is theprofessional doctorate, which allows professionalsto undertake work-based research in areas ofprofessional practice.The balance between subjects at doctoral levelis currently heavily biased towards science,technology, engineering and mathematics (STEM)subjects, with around 66% of PhD students studyingin those disciplines. This would seem to correlatewith the availability of funded studentships, whichare heavily dominated by the engineering andphysical sciences (Figure 3.8). Sustaining capacityin areas of research strength whilst ensuring thatinnovative and emerging areas are supported isimportant to retaining the UK’s position as a leadingresearch nation. The UK has seen a substantialgrowth in emerging knowledge-intensive industriessuch as the creative and digital industries, which willrely heavily on a strong research base in the artsand humanities. It is therefore important to ensurethat the sector is able to sustain doctoral provisionacross disciplines.3.4 Implications for the UK’s highereducation sector and economyPostgraduate students make an importantcontribution to the UK economy, to society andto the higher education community. Businessand industry value the high level skills, subject-specific knowledge and innovative approach thatstudents with a postgraduate qualification bring tothe workplace. The evidence suggests that therealso continues to be increased private benefits toundertaking postgraduate study. Unemploymentrates for those holding a postgraduate qualificationare lower than for those with only a first degree,6% in 2010–11 compared with 7.6% for the studentpopulation as a whole. There is also evidence that apostgraduate premium continues to exist; researchby the London School of Economics suggests thatthe wage premium for those holding a masters-levelqualification is on average around 15%. The benefitto the exchequer in relation to these higher earningsequates to around 27% on average.16Over the past decade the average proportion of theUK’s working population holding a postgraduatequalification has almost doubled, from 4.4% in 2001to 7.9% in 2011 (Figure 3.9).Figure 3.8: Postgraduate research students by subject of study, 2011–12Biological sciences0 2,000 4,000 6,000 8,000 12,00010,000Physical sciencesVeterinary scienceCombinedMass communication and documentationAgriculture and related subjectsHistorical and philosophical studiesLanguagesMedicine and dentistryArchitecture, building and planningComputer sciencesMathematical sciencesSubjects allied to medicineEducationLawEngineering and technologyNumber of studentsSocial studiesCreative arts and designBusiness and admin studiesSTEM subjectNon-STEM subjectSource: HESA16. BIS (2011) The returns to higher education qualifications