The higher education sector has hitherto been a stable market, but is now feeling some tremors and the potential for a full-scale earthquake. The Augar report is keenly awaited, with fears that it will recommend tighter controls on student fees, and will increase market competition, including enlarged post-16 learning options that could threaten university student recruitment .
If this wasn’t challenge enough, the student demographic is due to reach its lowest level of eligible 18-19 years old since 1950, before picking up again in the mid-2020s. Mature student applications have dropped, with nursing and midwifery applications down 10 per cent. Factor in Brexit uncertainty over student visas, together with European student access to UK universities, and we’re looking at a challenging picture for Vice Chancellors, faculty heads and estate leads.
Staying strong, embracing new models
Despite these challenges and show a sector that remains strong, maintaining its reputation for teaching excellence and world-class research. The shape of the sector may start to change, however, with new business models emerging. These could include collaboration with other universities, partnerships between FE and HE, and alliances with Multi-Academy Trusts and other schools. Some institutions will seek private sector partnerships and funding arrangements.
Know the market
From an estates perspective, effective planning for the long term is critical, even though some shorter-term tactical decisions may be required to balance immediate risk and uncertainty. For instance, some universities are continuing with capital development master plans, some are scaling back or heavily phasing their aspirations, and others are hunkering down until the future picture becomes clearer. Underpinning all activity is a pressing need to know the market and know the estate.
To know the market, we need to understand that young people’s aspirations and expectations are changing fast, as is the world in which they will work. For universities, this has become a competitive market, where the student experience is an important differentiator, as is health/wellbeing (for staff as well as students).
Flexible teaching methods and environments are needed to meet the challenge. Flexibility doesn’t just mean digital forms of student/lecturer engagement -it includes flexibility of space. New teaching environments may well be smaller, meaning reduced asset holding, supported by increased utilisation and enhanced student study and social areas. A multifunctional, lower cost estate (capital and operational costs), which is non-tenure specific and can be sold /repurposed for private rental, is a key consideration.
Know the estate
There’s a growing emphasis on asset owners knowing more about their assets, in all sectors, underpinned by the government’s acceptance of the Hackitt Report recommendations. In addition, government efficiency programmes, such as Transforming Infrastructure Performance (TIP), focus on data-led decision making, and the way in which it creates new construction approaches. These include standard platforms and componentised construction solutions, adding to the Modern Methods of Construction (MMC) agenda.
BIM, with its focus on data specification, collection validation and storage, is key to supporting these aspirations and to increasing productivity. has arguably been mis-sold - it’s not all about 3D models and new build. It’s about collaborative working, clear briefing, and data management and collection. It shouldn’t cost more either, if intelligently specified.
New contract approaches such as Integrated Project Insurance (IPI) and ICE Project 13 Enterprise should be helpful. Both aim for early ‘one team’ delivery, breaking the traditional tier 1 contractor model. Procuring for value is a growing mantra, aligning technical design, procurement delivery and construction (production) delivery. Often this is siloed, potential value is lost, and industry norms of behaviour, cost and schedule uncertainty prevail! Supplier alliance frameworks are not new, but their effective implementation creates added value through improved workforce and programme planning. We can also expect an increase in university/developer relationships and deals.
On the agenda
The following themes can support HE institutions in their planning - but remember, no one size fits all:
- Increased collaboration across the sector
- Growing knowledge of the estate, including asset data, utilisation, fit for purpose.
- Using estate data, plan future maintenance programmes to optimise budget expenditure and operational outcomes.
- Consider student experience and occupant wellbeing as well as statutory maintenance and health & safety.
- Work cross-sector or promote sector developers to design standard platform/component designs (which reduce cost and open up the supplier market, mitigating construction industry capacity and skills challenges.)
- Develop spaces that could be sub-let or sold for wider occupancy use.
Balancing risk and opportunity
The overriding message is that this is a period of uncertainty and change. Institutions need to be fit for that change, harnessing emerging industry initiatives, selecting the right supply chain partners, and making future plans that balance the risk and available opportunity. SNC-Lavalin’s Faithful+Gould business has worked with clients and industry bodies to support the above themes and to successfully develop efficiency initiatives at many HE institutions.