Ref 99/64

November 1999

A guide to assessing demand for local higher education provision

Outline of a structured methodology

This version of the document contains the Contents, Introduction and Background only. The full document is available in Word format.

Contents

Introduction
Background
General principles
Overview of the method
Detailed description of the method
Interpreting the results
Case study illustration
Sources of information
Glossary of terms

Introduction

In November 1998 the HEFCE helped to fund a study commissioned by the Combined Universities in Cornwall into the future student demand for higher education in Cornwall. This study is of interest to a wider audience because the structured methodology used has broader applicability. The overall approach described in this guide has already been used in a variety of different contexts. It has assisted with the analysis of demand at a regional and more local level.

This guide, produced by consultants, describes the key elements of the approach, the principles underlying it and the information sources required for the model. A case study illustration is provided, although for the sake of brevity the detailed workings and complexity of the model have not been fully reproduced here. The case study is drawn from the Cornwall research.

In common with other forecasting and appraisal techniques, the outputs from the model are sensitive to changes in key assumptions. We have not sought to be prescriptive about these assumptions, which will vary according to local circumstances. However, this guide does identify the key sensitivities and the basis on which the assumptions underlying them might be made.

As with all quantitative techniques, a sound understanding and interpretation of the figures generated is key. It is worth emphasising that the method outlined investigates potential changes in demand. The ability to translate potential into actual student numbers will be influenced by numerous external and supply-side factors. Also there will almost always be some degree of mismatch between supply and demand. This mismatch is accentuated as the geography of the area under analysis becomes more narrowly focused.

For these reasons actual demand will always tend to be lower than potential demand indicated in the model. This guide therefore concludes with some tips on interpreting the findings of the analysis.

At a time when the higher education sector is facing a range of challenges, and needs to respond flexibly our view is that the approach has much to offer. It can be used to investigate - and stimulate debate on - market dynamics and strategic positioning. It also provides a rigorous analytical tool for assessing demand and informing future bids for student numbers.

We are committed to sharing the results of our research - as is the case here where the findings are of interest to a wider community - in an informative and easily understood manner. This guide has been prepared with these principles in mind.

Background

Factors influencing student demand

The nature of higher education has changed significantly over the past 30 years. The number of students studying at higher education institutions has increased dramatically. In the 1960s there were around 200,000 full-time students. This figure has now risen to over 1 million.

However, it is not just total student numbers that have changed. There have been dramatic changes in the composition of the student population with the growth of mature and part-time students.

The policy framework

Major policy changes have been introduced by Government and the HEFCE following the Dearing Committee’s Report. In relation to demand, perhaps the most notable changes concern student finance.

Key developments here include the introduction of the means-tested fee and the replacement of maintenance grants with loans. These changes are expected to have a major impact on demand, with the preference for local institutions and part-time study increasing.

The knowledge economy

In the workplace a more educated, adaptable and flexible workforce is required. There is a need to respond to the new skills required in a knowledge economy and to provide for lifelong education.

The higher education sector also has a key role to play in facilitating innovation in business. The potential of the sector as an engine for growth in the knowledge- driven economy is recognised by the HEFCE and the Government.

A plethora of recent policy pronouncements and funding initiatives is encouraging ever closer links with business. These include the DTI’s 1998 Competitiveness White Paper and new funding initiatives such as the Higher Education Reach-out to Business and the Community Fund, supported by the DTI, the DfEE, the HEFCE and DENI.

Widening participation

A further influence on demand for higher education stems from recent HEFCE policy and funding initiatives aimed at making undergraduate higher education more socially inclusive.

Widening access will have broader implications for the sector. For example, flexible learning opportunities will need to be increased through course modularisation and credit accumulation.

Regional government

Significant changes have taken place in the structure of government with the establishment of Regional Development Agencies. (RDAs).

The objective of the RDAs is to promote sustainable development and regeneration. Higher education institutions have a key role to play in supporting RDA strategies.

The introduction of a stronger regional dimension into government is also expected to encourage much greater interest in the needs of - and potential demand from - the local community and industry.