Where are all the students?

The Government wants more people to go to university. Yet some institutions struggle to recruit. Lucy Hodges explains

Ministers were urged last week to provide funding for another 250,000 places in higher education if Tony Blair was to meet his target of one-half of under-30s going to university. Yet at the same time Sir Howard Newby, chief executive of the Higher Education Funding Council (Hefce), said that five universities would be losing serious amounts of government money this year for failing to recruit enough students for their courses. What is going on here? How can some universities be struggling to find students, yet the Government be expected to fund a big expansion?

Ministers were urged last week to provide funding for another 250,000 places in higher education if Tony Blair was to meet his target of one-half of under-30s going to university. Yet at the same time Sir Howard Newby, chief executive of the Higher Education Funding Council (Hefce), said that five universities would be losing serious amounts of government money this year for failing to recruit enough students for their courses. What is going on here? How can some universities be struggling to find students, yet the Government be expected to fund a big expansion?

The answer, it seems, is that while a small number of institutions had some difficulties this year, the sector as a whole has continued to recruit well. Numbers increased by 18,500 or 1.6 per cent. "We expect demand to continue to increase for the rest of the decade because of an increase in the overall population of 18 and 19-year-olds and improvements in staying-on rates from schools," says Sir Howard.

All the universities suffering what is elegantly known as "holdback" are new universities: Middlesex, Coventry, Staffordshire and South Bank are former polytechnics; the fifth, Luton, was never a polytechnic but became a university straight from being a college of higher education. All are being helped to adjust to the cuts in their grant allocations by being given sums of money to ease the pain. Thus, Middlesex is suffering a theoretical cut of £2.48m but is being given £1.85m for one year so that it can make the necessary changes. Staffordshire is losing £2.36m but being given £2.3m to absorb the hit. Coventry is being cut by just over £2m but receiving £1.85m in moderation.

All are affected by changes in what has become an intensely competitive marketplace for undergraduates. Student demand is volatile. In recent years computing has become a much less fashionable subject following the bursting of the dot.com bubble. At the same time the "old"universities have been allowed to expand. This has meant that they have been taking some of the students who would normally have gone to the new universities. They have copied the new universities by laying on courses in business and sports science. And some of the old universities with middling reputations have intensified their efforts to boost undergraduate numbers to compensate for money they lost in the 2001 research assessment exercise.

None of this is good news for universities towards the bottom of the league tables that find it hard to recruit at the best of times. In the case of the five suffering this year, other factors such as geography also come into play. Both Middlesex and Luton universities are on the edge of London, in an area that is well served with higher education institutions, so they face stiff competition. The fact that Middlesex, a well regarded new university, is 500 students short this year, shows how tough things are.This has not come as a surprise to Professor Michael Driscoll, the vice-chancellor. The last four years have seen a decline in the total number of university applicants in London, he says. Four years ago there were 40,000 more than there are today. One reason is that more young people who live in London are choosing to go to university outside the capital. The other is that London has become less of a magnet to young people in the provinces because of its high cost. The introduction of the tuition fee in 1998 did not help either, says Driscoll. It led to a drop in mature students, which was serious for a place like Middlesex where more than half the student body is mature.

The decline in mature students accounts for much of the fall in applications in London. Like three of the other universities suffering cuts, Middlesex will have its grant allocation chopped next year. That is disappointing for Professor Driscoll but he takes heart form the rise in applications this year and from the fact that his university has become increasingly independent of Hefce funding. It receives only 40 per cent of its money from the funding council and has achieved this by recruiting increasing numbers of overseas students (it is the university with the second-highest number of overseas students), and by increasing postgraduate numbers.

Luton has been here before. In 2001, it was forced to produce a recovery plan after failing to recruit enough students, so the fact that it is in the same position again is serious. Three years ago, it closed nine subjects in humanities including history, English, politics, modern languages and maths. Instead it shifted into the fashionable subjects of media studies, computing and sports science.

That has not worked. Applications for computing have declined by 10 per cent nationally this year, and Luton has also suffered a drop in applications for sports science as other universities have jumped on that bandwagon. "I came into the job on 1 September, 2003, and could see that we had a recruitment problem," says Professor Les Ebdon, the new vice-chancellor. Luton responded by getting rid of staff. About 70 have left through a combination of voluntary redundancy and natural wastage. The university needs to put more effort into "customer care", says Professor Ebdon. "We have had stable applications in the last few years, so we have to see our task as converting more of the applications we get into students." But even Luton is relatively sanguine about the £1m it is losing on the grounds that more than that sum is coming from the 2,200 overseas students paying premium fees.

Some experts, however, believe that Luton needs to make more drastic efforts to reinvent itself because of its position near the bottom of the league tables and its location, which means it is not served by a big urban hinterland. "I think it needs to find a brand for itself," says Ian McNay, emeritus professor of higher education and management at Greenwich University. "Perhaps it should be the easyJet University, looking to recruit at the end of the easyJet routes in Europe."

But it has another problem, he says. It doesn't have the prestige to appeal to some of the ethnic minority families in the area. It either needs to do things differently or look at new things to do. Another university that has been in the same boat before is London South Bank. Deian Hopkin, the vice-chancellor, arrived several years ago to find that £6m was being held back by Hefce. He had to make 128 redundancies and ended up virtually restructuring the entire university. It now has a £4m surplus, but it is having money held back this year as a result of its decision to get out of expensive science and engineering courses and into performing arts and business. Hefce funds the latter at a lower level than the former.

South Bank has moved out of the volume undergraduate business, according to Professor Hopkin. "At this stage it's too risky because numbers fluctuate and London is a volatile market, very susceptible to fashion and expensive for students," he says. So the university has diversified, notably into NHS work; 36 per cent of its funding now comes from Hefce and 24 per cent from the health service. In fact, South Bank is one of the largest providers of NHS training in London, turning out trained nurses, radiotherapists, radiographers, physiotherapists and occupational therapists. At the same time, overseas student numbers have climbed. What is happening is that the universities in difficulty with the funding council have changed the nature of what they do - and are doing so with surprising determination and cheerfulness. The result is that they are beginning to look very different compared with a few years ago. Staffordshire has never suffered holdback before but, like the others, is trying to reduce its dependence on Hefce to secure its funding. It has suffered from lacking a big urban hinterland and from having Keele next door, an old university which has been to recruiting more and more undergraduates as its Research Assessment Exercise money has fallen.

Paul Richards, Staffordshire's deputy vice-chancellor, says the university is finding new money from more international students, more postgraduates, more part-time and locally based and more foundation-degree students. "A reduction of £1m in the Hefce grant against a turnover of £80m - and growing - is by no means the end of the world," he says. "We saw this coming so we planned for it as a strategic opportunity to reposition ourselves."

As a university in the heartland of the British engineering industry, Coventry has tried desperately to hang on to its science and engineering courses which is one reason why it has not met its student target numbers. "These are not popular subjects and there is over-provison," says Professor Mike Goldstein, its vice-chancellor.

"We are now trying to stay one step ahead of the game by developing new programmes, by trying to expand our markets, getting a slicker applications process and trying to attract more young people through open days."

If Sir Howard Newby is right and the system is heading for expansion, these universities should not have the same problems recruiting students in future. Bahram Beckradnia, director of the Higher Education Policy Institute, says: "In future, these universities should no longer fall foul of Hefce funding rules, because there are going to be more students in the UK as well as more coming from the expanded EU."

l.hodges@independent.co.uk