Peter Crisp: Universities must start having private thoughts

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The uncharitable might observe that British universities are the NHS of the education sector: publicly funded, bureaucratic, world renowned for their research, managed by committee and not customer driven.

If the past decade was all about the public having their say in how their NHS should be run, then my prediction for the next 10 years is that students will demand what they want from their education provider. Like it or not, many higher-education providers will have to wake up and start to think commercially.

I'm not talking about ambitious targets to keep classrooms full and funds flowing in, but about providing niche programmes that are practical and relevant to the shifting patterns of the workplace and the economy. Traditionally, many universities have competed on reputation and research capabilities, but this will change. Instead, the focus will be on the quality of the student experience, support and employability. Student needs are changing and, like any consumer, their demands will lead to more choice, which ultimately drives healthy competition.

The workplace is also changing dramatically. The CBI predicts that businesses will have to contend with new challenges in managing employees, as four different generations, each with different motivations and expectations of employment, will need to work alongside each other. Furthermore, those from "Generation Y" – people born between 1979 and 1994 – will have a major impact on the workplace. This generation typically thinks of a career consisting of a variety jobs, with the expectation that their employment will accommodate their family needs and personal lives. They are the first generation of "digital natives", who make extensive use of new technologies, social networking and other novel ways of sharing information – and, crucially, new ways of learning.

We will see a marked increase in the number of students studying while working, varying the pace at which they study; seeking flexibility around start dates and times; choosing to stop and start when lifestyle changes demand it, and actively looking for roles in organisations which will sponsor their study.

The political consensus from both the Government and Opposition echoes the fact that students should be treated as consumers, an interesting concept to watch as we move towards the general election. A Universities UK report into private higher education noted that some universities would struggle with this perception and get caught in the middle of competing on costs while maintaining standards. If the Conservatives win, I suspect they will be radical in their approach to the sector, and we will see reform in all aspects of education in the medium term. The Labour Government has already indicated a large reduction in public money for the university sector, a trend that will increase as the country simply cannot afford to fund universities based on a model that has been in place since the Second World War. Even the NHS, which started life in 1948 has moved on since then! Less funding is likely to force universities to be more commercial. Those that are not will be faced with mergers, or will simply go out of business. Universities need to adopt a new business model in terms of delivery of teaching and carefully managing their cost base.

Day release, evening, weekend and online teaching models will become more prevalent. To cater for the "any time, any place, anywhere" generation, simply having an over-sized campus, with unfilled classrooms in one location will be a distinct commercial disadvantage. Look at the big supermarket chains and their move away from having one out-of-town superstore, towards opening up smaller high-street concessions aimed at those with changing lifestyles and working patterns.

A strong private-education sector has a vital role in providing an alternative model and reducing the overall cost to the taxpayer. Most British universities enjoy massive state funding and get considerable tax breaks, meaning that the taxpayer loses out both ways. The private sector enjoys neither but still delivers high quality, affordable education, simply because it has to be more efficient.

Lord Browne's review of fees and university funding, which began last year, will be watched with eager eyes by those in higher education. Whichever party wins the election is likely to raise the fee cap and acknowledge the role of the private sector in order to give an honest answer to the question: "Is the system affordable in the long term for all those who invest in it, including students and the state?"

The writer is Chief Executive of BPP Law School