As the UK Higher Education and Research Bill makes progress towards Royal Assent and the country enters Brexit negotiations, a difficult and uncertain future awaits British universities, RSM’s latest educational report finds.
An analysis of higher education risk registers carried out by audit, tax and accounting firm RSM has revealed that finance, organisational factors, estates and people related risks continue to be significant problem areas for institutions.
Finance associated risks remain the main risk areas currently facing UK universities, with budgetary management the key concern. The report also revealed a five per cent increase in risks relating to government funding and policy, with developments such as the Higher Education and Research Bill and the introduction of the Teaching Excellence Framework identified as having a potentially significant impact on student numbers and university income.
The second largest area of risk relates to organisational factors such as internal governance and resources, accounting for 13 per cent of all major risks. Identified risks include failure to implement policies and procedures effectively which could lead to potential internal system failure and negatively impact institutional performance. Sixteen per cent of governance risks related to reputation and competition, with particular concerns around graduate employability and opportunity, as well as the quality of staff and student welfare.
Concerns around student numbers also featured in the risk registers analysed, with these risks increasing by six per cent since 2014. Almost half of the risks in this category related to a failure to recruit students at either undergraduate or postgraduate level.
Many institutions have also flagged specific Brexit risks such as the potential loss of key research funding from the EU, the status of non-British European staff and the potential for EU students to be reclassified as international students requiring them to have visas to study in the UK and to pay higher fees.
Lisa Randall, Partner and Head of Education at RSM said that:
‘This is a challenging time for higher education institutions in the UK with a significant increase in concerns around the overall economic climate and the financial health of the sector.
‘Add to this the new risks resulting from Brexit, British higher education institutions will need to adapt and innovate in order to maintain student numbers, secure financial stability and sustain their reputation.’
Click here for the Higher education risk analysis report in detail.