A-level results day highlights future income shortfall for higher education sector

Louise Tweedie, risk assurance director and education specialist at RSM, said: ‘Based on acceptances to date, this would be a shortfall of income of £30m across the sector (assuming £9,000 fee). Across three years, this is a significant potential loss of income, which will make the clearing process even more competitive this year. 

‘In 2018, UCAS placed 66,770 people via clearing, so institutions will be hoping for a successful clearing process to recover any potential income shortfall. UCAS has already stated it expects to place around 70,000 through clearing in 2019, so there is an increased number of clearing places up for grabs this year.

‘Doing well in clearing will be vitally important for some institutions, based on the Office for Students report from April 2019, which reported on ‘financial sustainability of higher education providers in England’, and noted that some institutions were reliant on ‘ambitious assumptions about growth in student numbers’ for their financial forecasts; as such the fall in placements to date and acceptance to date will be causing concern.

‘The pass rate has remained consistent with the prior year at 97.6 per cent. However, Government statistics show that the number of A-level entries fell from 759,670 in 2018 to 745,585 in 2019 meaning that there may well be fewer students with A-levels in circulation for universities to recruit.

‘Given the Government focus on apprenticeships in recent months, this could have a further impact on the numbers choosing university, as apprenticeships with the focus on earning whilst learning is becoming more attractive. In addition, the Augar review mentioned a possible future fee reduction to £7,500 per annum, and students are aware of this, so they may also decide to take a gap year in the hope of incurring a lower level of debt initially.

‘If you combine fewer students with A-levels; a focus on apprenticeships; possible reductions in fee; and a very competitive clearing process; UK university could face a significant income shortfall this year – applying more pressure to the fiscal position of the HE sector. Universities need to ensure they have effective marketing coupled with a diverse offer to attract students.'

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