Read on to learn about the top risks facing the higher education sector. The Higher Education sector has undergone significant changes over recent years including a fundamental cultural shift with students viewing themselves as consumers. This change has increased the level of scrutiny over the cost of achieving a degree as well as questioning the overall value students receive. Financial uncertainty with funding reviews and ongoing Brexit negotiations continue to add unpredictability to the sector. This turbulent environment means that risk management is of growing importance to the sector.
University management and governing bodies will need to identify and understand the risks facing the organisation, decide how to manage these risks and determine the actions that are required to mitigate them. Good risk management practice will help the university to ensure that it successfully meets its strategic objectives.
A recent report by PWC ‘Managing risk in Higher Education Higher Education Sector risk profile 2018’ shows the top risks as reported by 37 Higher Education Institutions over the last 5 years¹.
1. Student Recruitment
Throughout the last 5 years, student recruitment has remained as one of the Top 5 risks. Ensuring student numbers allows for the institution to run as profitably as possible. The sector has seen a decrease in the number of overall applications for places with a 5% drop in applications made to UCAS for the January 2017. Applications in England made by those 25 years and over decreased by 23%2.
The introduction of tuition fees will no doubt have had a negative impact on the number of applications. In 2018, 23% of 18-year-old applicants were given an unconditional offer and unconditional offers account for 7.1% of all university place offers. The competition between universities has driven this increase3. This will no doubt have a negative effect on some of the students as they will no longer need to strive to attain certain A Level grades to gain a university place.
The Department for Work and Pensions states: ‘Under the Pensions Act 2008, every employer in the UK must put their qualifying employees into a pension scheme and, where appropriate, pay contributions. This is called ‘automatic enrolment’4. Pension schemes have seen increased contributions by employers and members. This increases the pressure on costs for the institutions which will require savings to be made elsewhere. Making alternative efficiencies and cost savings is of growing importance to the sector.
3. Government policy
The Government reviews the tuition fees and determines the future funding available for the sector. This level of uncertainty makes forecasting difficult. The UK Government is also campaigning to promote higher and degree apprenticeships. This will pose a risk to student recruitment for universities as its potential students have more options available to them.
Ensuring stakeholder confidence (including staff, students, partners, funders) is key to the success of an institution. The Teaching Excellence Framework (TEF) category awarded to the university will have considerable impact on the university’s reputation and can impact positively on the university meeting its objectives. Those that score highly will be able to raise their tuition fees by inflation too.
5. Information Security
GDPR will affect the higher education sector significantly. Ensuring compliance with GDPR will require time, effort and new processes to be created. Universities hold a vast amount of personal data – including students, employees, prospective and previous students, and suppliers.
Businesses are becoming increasingly reliant on online technologies to function. However, this increases the risk of cyber-attacks. It is necessary to protect against unauthorised attempts to access digital information including research. Assessments of the financial, reputational and legal risks of a breach should be produced and appropriate controls should be put in place to mitigate them.
Risk management software
Risk management is increasing in prevalence in the higher education sector and as such, you may find it useful to use dedicated risk management tools to assist in managing risk. JCAD’s risk management solution, CORE, is a simple, off the shelf, web-based solution which will help you identify, manage and mitigate your risks. As a centralised system, all your risks will be managed and reviewed in one place which improves efficiency and provides more accurate reporting.
- PWC Managing Risk in Higher Education Sector risk profile 2018
- UCAS: https://www.ucas.com/corporate/news-and-key-documents/news/applicants-uk-higher-education-down-5-uk-students-and-7-eu-students
- BBC News: https://www.bbc.co.uk/news/education-44954154