Successive governments over the past thirty years have sought to expand higher education in order to fuel a high skills economy rooted in R&D. The consequence of expansion is the burgeoning public debt of the student loan book. It makes university education accessible, but also leads to quasi-public/quasi-private institutions having a greater reliance on the public purse. The consequence of this is the kind of limitations the government can impose on institutions. Student number controls, which afford greater direct control of spend on universities, have appeared in different guises over the years with their focus depending on current policy questions and concerns.

Recent speculation on a potential return to SNCs has caused us to ask whether they work and what impact they have.

Do Student Number Controls work?

Yes and no. SNCs have been used as a temporary fix in response to funding constraints. If the policy intention were to restrict overall supply and cost, then a macro-level SNC could enable this but would remain a short-term intervention without a longer-term view on the desired size and shape of higher education.

Conversely, if the policy intention were to influence what and where students study, a more granular SNC could be effective. Medical student places already operate under a cap which has enabled numbers to be managed and expanded depending on need, leading to additional investment and the creation of new medical schools. There could be potential for a more nuanced SNC to deliver the twin aims of managing cost and encouraging students towards subjects with higher employability.

Do SNCs affect all institutions the same?

At a macro level the impact depends on the type of provider. DataHE analysis demonstrated how student recruitment trends altered during the pandemic. In the absence of international students, and with higher student achievement awarded as teacher assessed grades, the demand pattern changed as more students achieved the grades to go to their first-choice, higher tariff institution.

With Home Undergraduate fees fixed by Government, institutions already operate in a quasi-market where entry tariff rather than price is the differentiating factor between institutions. Tariff doesn’t equate to ‘good’ or ‘bad’; instead, it equates to relevancy (of the teaching, of the similar capability of the cohort). If there were a reduction in international students along with the planned post pandemic reduction in grade profile for A levels, then we could see some institutions lower tariff to increase recruitment and market share in order to maintain financial position. Where this leads to higher reputation providers taking students with a lower tariff it could both disrupt the local student market and have a cascade effect through the sector such that an SNC would have a differential impact depending on a provider’s market position.

For higher tariff institutions SNCs could help safeguard the quality of their intake, preserving their brand, reputation, and focus. However, recent expansion by some higher tariff providers highlighted that increasing the range of intake quality changes student support needs, and providing different scaffolding for learning, teaching and student support is both culturally and practically challenging. This creates an interesting challenge for universities: to what extent are they willing to potentially compromise the academic standards of their intake in order to provide greater financial sustainability.

Among medium and low tariff institutions, SNCs could provide protection from the “squeezed middle” by distributing demand across the sector. But if teaching quality is poor and marketing and admissions processes clunky, institutions will – rightly – lose out to other parts of the sector.

Institutions hampered by inefficient structures, processes, systems, and cultures will be outperformed by those able to be more pragmatic and fleet-of-foot. Whether there is an SNC in operation or not, these institutions will fail to attract the volume of students required to fund their expensive, inefficient structures leading to a lowering of entry tariff and creating a downward quality spiral.

In a marketised, rankings heavy sector, recruitment success depends on perceptions of quality and strength of brand. In this context, an SNC incentivises efficient and effective practice as much as it reinforces long-standing brand benefits.

Do SNCs restrict student choice?

Only if grade inflation at GCSE and A-Level continues to homogenise entrants. Arguably, the cost-of-living crisis could have a far more restrictive impact should it create a two-tier system of commuter students versus residential students. In that context, the Lifelong Learning Entitlement could present an opportunity to create innovative models of study across modes and providers.

How can providers prepare?

Institutions can use a range of tools and techniques including Target Operating Models and student journey mapping to develop an academic portfolio and student experience which offers high value for money. Rather than a further step in regulating the sector, SNCs could motivate providers to take bold action to improve efficiency, effectiveness, and attractiveness to the benefit of students and stakeholders.

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