British Universities are on the brink of a period of accelerated growth, driven by domestic and overseas, (Chinese especially), demographics. Over at Toscafund, my old colleague Dr Savvas Savouri and his research team have authored a piece on University growth which ought to have Vice Chancellors, Local Authority planners, developers and indeed investors thinking hard about it's implications. Westminster will as usual be last and late to the party but we can but prod them into some form of animated sentience rather than their usual reaction at the last moment usually that of a stunned halibut.
The executive summary is below followed by the full piece, (published with the authors permission). It is a very interesting read. It is positive and it is good news. Why isn't anyone telling the nation when we get things right?
"Within a handful of years UK university enrolment will begin to move sharply higher. It is only a matter of time before two-year undergraduate degree become commonplace, doing so in response to practical and commercial considerations for students, universities and tax-payers alike. Moving from three to two-year courses eases the overall cost burden on students whilst allowing universities to more intensely work their assets. For even with overall enrolment constant, universities could use accelerated degrees to shift the student mix towards those paying more lucrative fees. They could for instance increase the share of postgraduates and/or undergraduates paying 'premium' fees, notably those from outside the EU, and in particular those applying from China.
Using a combination of demographic and macro-economic data from within China since 2002, we predict that in 2025 there will be in the region of 117,000 applications from China into the UK’s higher education sector, increasing to 239,000 by 2034. For context the most recent figure for 2016/17 was 66,415. By 2034 there will be over half a million Chinese studying in UK-based universities, representing over half of all international students. For context the present share is just over one in five. Whilst other nations around the world will compete with the UK in meeting China’s educational needs, nowhere across Europe will come close to matching the UK’s role.
As a result of the rise in births post-2002 as well as other socio-economic factors the number of Britons enrolling at its universities is likely to reach 2.4 million by 2034, up 29% from the 1.9 million studying in2016/17.
The region which will experience the largest rise in student numbers is expected to be Southeast, whilst theEast midlands will enjoy the strongest percentage growth. Scotland and London are expected to lag most in capitalising on international student demand, albeit for quite different reasons.
When raising their capacity few industries have as voracious an appetite to consume real estate as education. It is for this reason that universities which have little space to expand around their existing campuses will have no other option than to find room elsewhere across the United Kingdom. They will take-up and regenerate existing real estate as well as creating new space on hitherto undeveloped ground, quite possibly traditional agricultural land.
We anticipate that employment across the UK’s universities will rise 30% to over half a million by 2034, the sharpest increases being recorded in the South East (beyond London), North West (around what is fast becoming Man-Pool) and Midlands (containing as it does a great many city-centre and campus universities), with the weakest increases in Northern Ireland, Wales and Scotland (because of its “outlier” approach to student funding). Growth in staffing and increased need for real estate will of course correlate strongly with where the increase in student numbers is comparatively strongest. This will in turn be closely connected to the rise in freshers coming from China. We estimate employment across the overall education sector willincrease by 830,000 reaching 3.9 million by 2034, section 1.16.
As overseas demand for their courses increases the names of British Universities will become metonyms for international campuses; a process in fact already underway. Some will also add a virtual presence to offer distance learning, again something which has already been seen, This accepted, and to repeat, the names of UK universities will ever more perceptively adorn campuses, teaching in the traditional way and away from their traditional centres, but still somewhere in the UK. Having seen this phenomenon come to London, “satellite” London brands will soon be seen beyond it. We are in short about to see the writing of an entirely new chapter to Britain’s regional real estate growth story, and a very educated one it will be at that."