Higher Education Institutions make significant contributions to the local economy, directly through the labour market and, indirectly, through student spending in the community, and also contribute to the social and cultural life of their regions through support for minority communities, theatre, cinema and the arts.
The higher education sector consists of some 170 institutions catering for a rich diversity of students from both local as well as overseas. The student body is growing in size and character with an increase of over 39% between 1995 and 2003 to a current total of 2.2 million students. Such growth is unprecedented and has been managed against a steadily declining unit of resource for teaching which only levelled off in 2002.
Unprecedented increases in the teaching function have presented universities with a range of financial and academic challenges during the last decade and have stimulated wide spread curriculum renewal, new modes of teaching and learning, and significant investment in the professional development of all categories of staff. The most recent challenge with respect to students will be the introduction from 2006 of differential fees for full-time students from the European Union. This is likely to stimulate an even more customer and client responsive culture in the sector. Even so, some institutions and courses make a loss on every student they teach; hence cross-subsidy is necessary and much teaching and research has been at the expense of investment in infrastructure. Margins across the sector are paper thin.
Many of the students now entering the English universities come from family backgrounds and geographical regions which have been traditionally under-represented in higher education. Despite the increasing and more diverse student population course completion rates continue to be high and record numbers graduate with a gradient of awards from foundation to doctoral levels. England completion rates are amongst the highest in the world.
Finance and Unit Costs
Universities derive their income from a number of sources with the bulk coming from the Funding Councils (39%) and grants from the UK Research Councils (17%). The course fees received from the students make up some 25% of income and approximately 19% of total income is self generated through consultancy, business contracts and spin off companies. Virtually all institutions worldwide face considerable cost pressures as they seek to satisfy rising student demand within constrained state budgets. Unit costs per full-time student have fallen significantly from around 7,600 to 5000 in the period 1989 to 2003. Few outside higher education appreciate that the value of higher education and training exports from the combined England universities totalled 4017M in 2002, a sum which clearly demonstrates the sector's contribution to the national economy. There is every expectation that this amount will continue to rise as our institutions continue to attract students from overseas and track and contribute to