Post 61 – 05/06/24 Economics Part 1 – A Broken Model? (5 Minute Read: Gin Rating; Double.)
Universities up and down the land are having a challenging time…
1. Domestic students are beginning to question the value of a degree qualification.
A BBC documentary reported that in a 2022 study, 69% of graduates in England felt that the cost of a university education offered bad value for money. Grade inflation along with the high cost of gaining the qualification (the forecasted average student loan debt among borrowers who started their courses in 2022/23 is £45,600) have led to enrollment figures plateauing.
2. International students have declined sharply.
Factors here include: immigration restrictions: Brexit and uncertainty over post-study work. There are also specific issues in certain markets too; Nigerian and Chinese students at the moment are staying away.
And for RHUL specifically they are probably having to battle with a decline in reputation too: https://weneedtotalkaboutroyalholloway.com/quantity-over-quality/
3. A cap on student tuition fees.
(Fees are currently capped at £9,250 PA) while costs continue to escalate. Central government policy has provided no provision for inflation etc.
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An organisation can increase its fortunes by adopting one or more of the following business principles:
+ It can increase its price,
+ It can increase its volume,
+ And/ or it can decrease its costs.
So if RHUL can’t increase revenue by increasing their prices because of the cap, and it can’t cut costs easily because they have a reportedly stretched workforce. (We have received reports that parts of RHUL’s workforce is demoralised and skeletal: some RHUL departments are reportedly so stretched that some students are complaining about the service they are receiving. Last year’s strike action also led to delays in marking which in turn led to some students not knowing their results which in turn impacted their job applications.) We should also point out here that an article written in June 2021 from Royal Holloway University & College Union, RHUL has a very high level of indebtedness. At that time, it is claimed that there were apparently only 9 more universities more indebted.
So, in these circumstances, what can RHUL do to help balance the books?
Well you would do the last thing that is available to you: you would try to grow your top line by increasing your volume: by putting more students on your courses you could increase your fortunes. And for RHUL, the number they are aiming for now is 15,000 by 2030 (a ‘modest’ 25% increase).
So it would appear that is RHUL’s goal, to grow their business by increasing the number of students. And in their financial statement 2022/23 they quite proudly promoted the fact:
‘During 2022/23 the University increased in student numbers once more to 11,921, compared with 11,339 FTEs in 2021/22 (an increase of 5.1% year on year).
But does RHUL have a plan to deliver this without further impacting the community in which it sits?
Unfortunately, it would appear not: we believe we know the answers to two areas of their plan though.
+ Where is RHUL going to house these students? In the community it would seem. (And it should be noted here that this is in conflict with the RBC Local Plan 2030 where it states that to minimise the pressure on the existing housing stock, it is important that new accommodation is provided to meet the proposed growth in student numbers.)
+ What new mitigations are they going to reduce the impact? As we know from Tracy’s email dated 11th Oct 2023, not many.
And when asked to attend RBC’s Overview & Scrutiny Committee to answer questions about their expansion plans they declined and instead submitted a statement.
RHUL has a strap line, ‘We take being a good neighbour seriously.’ Unfortunately, their actions don’t demonstrate this. Does RHUL really care about the community in which it sits? We think not. RHUL’s take on Corporate Social Responsibility we think is pretty far down on their list of priorities and we think this is due to some pretty poor leadership at RHUL’s helm. We need a better university, not a bigger university: for students, for staff, and for the community. The university business model is broken. It’s time for a rethink.
Tomorrow we will look at some of the economic winners and losers that have come about from having RHUL on our doorstep.
Best wishes,
We Need To Talk About Royal Holloway
Notices:
1. Election Results: Englefield Green, Paul Gahir, Labour. Egham Town, Geeta Moudgil. We would like to congratulate the winning candidates and hope to meet them soon. We would like to send our commiserations to Amanda Willis – we think she would have made a great councillor and hope that she will stand again when the opportunity presents itself.
2. Save the date. Only 33 sleeps until Saturday 8th June. More details to follow.
3. For the benefit of people that have recently joined this group: https://weneedtotalkaboutroyalholloway.com/timeline/
4. Home Page: https://weneedtotalkaboutroyalholloway.com/
5. To discuss the problems surrounding RHUL, consider joining the WNTT Forum Whatsapp group: https://chat.whatsapp.com/BQmFKEHSa6gLsU55FU8QxN
6. If you have a story relating to the handling of RHUL student related issues, good or bad, we would like to hear from you. Please send an email to: enquiries@weneedtotalkaboutroyalholloway.com with a brief outline and someone will get back to you.
7. Next Weekend’s Post: The Impact Of HMOs On Our Schools