UK universities may open EU branches due to Brexit
British universities are considering opening branches within the EU to counteract complex regulation and funding challenges following the Brexit vote. University leaders say they are facing a period of intense uncertainty and risk as they deal with the threat of Brexit, new government appraisals and increased competition in the sector. An EU outpost would allow UK institutions to maintain partnerships with EU universities, allow them to spread the risk of a "hard" Brexit and could provide a way of retaining and attracting staff needing to work in the EU.
British universities are considering plans to open branches inside the European Union in an effort to soften the blow of Britain’s exit, as they struggle to navigate new challenges in regulation and funding.

As hundreds of thousands of students across the UK prepare for their first week of lectures and seminars, university leaders, juggling the threat of Brexit, punishing new government appraisals and increased competition both inside and outside the sector, say they are facing a severe period of uncertainty and higher risks over the next 12 months.

The Guardian spoke to vice-chancellors, senior staff and students to assess the state of British universities. A period of huge growth in recent years, fuelled by tuition fees, has provided them with funds to expand significantly – and go on a multibillion-pound spending spree on new facilities and buildings – though there are fears students are paying too much of a price.

The new library at the University of Birmingham. A huge period of growth fuelled by tuition fees has provided universities with funds to invest in new facilities and buildings. Photograph: David Sillitoe/The Guardian

The steady increase in the number of people attending university has come in spite of mounting debts among students. Graduates now leave higher education with an average debt of £44,000, compared with £16,000 for those who graduated five years previously.

Now university leaders say they expect that Brexit will make student and staff recruitment much more difficult, cutting off EU research and funding and probably constricting the flow of EU students, who have been the fastest growing proportion of young undergraduates while the number of 18-year-olds in the British population has been shrinking.

“You can imagine a situation post-Brexit where UK universities are operating as aggressively in Europe as they are in China and India and elsewhere.” said Chris Husbands, vice-chancellor of Sheffield Hallam University.



One vice-chancellor said: “Brexit cuts off our head and the HE [higher education and research] bill cuts off our legs,” as he revealed that his institution and others were in the process of “window shopping” regulatory regimes within EU countries, and considering which would be the most cooperative.



Another vice-chancellor predicted that it was only a matter of time. “It’s a question of what the model will be, not whether we’ll adopt the model,” he said.

“Clearly, all research-intensive universities will be focusing on what is the appropriate structure to maintain their credentials as European universities.”

For British universities the attractions of an EU outpost are several: it would allow them to keep a foot in the door in maintaining partnerships with other EU universities, it would spread their risk in the event of a dramatic “hard Brexit”, and it might offer a way of retaining and attracting staff who needed to work within the EU.

The Republic of Ireland, Finland and the Baltic states have emerged as preferred options for some, while others have looked to countries where their university has existing ties, such as Germany.

“A piece of advice I’ve had is, if you are looking anywhere don’t look at France because it’s a nightmare,” said another vice-chancellor, who said his staff had been studying the options for opening a research institute that would allow access to EU research funds.

At the same time as the Brexit challenge, universities are anxiously waiting to find out the results of the government’s initial teaching excellence framework (Tef), which rates universities on a range of student data such as employment and will be linked to universities’ ability to raise future tuition fees.

And just over the horizon looms another threat within the latest higher education bill, the lowering of the barriers to new institutions opening and a fast-track to them gaining degree-awarding powers.

The universities considering EU branches do not want to reveal their plans in progress, and some others remain unsure.

“There’s an open question whether this would genuinely secure access to grants,” said Husbands. “If you are going to do that – let’s say you are operating in Belgium – you are going to be operating in the regulatory regime for higher education for Belgium as well as the regulatory regime in the UK.

“I know people are looking at it as a possible route. If you are a research-intensive university, like the University of Cambridge, you’ve got very serious amounts of money tied up in this.”

Husbands said that cutting ties with the EU would not necessarily cut off students from EU countries, many of whom have been willing to take student loans to meet £9,000 fees rather than free tuition in their home countries.

The combination of problems for rectors and vice-chancellors comes after a period of relative stability since the imposition of the £9,000 tuition fee for undergraduates in 2012, with easier access to finance and the end of government-imposed caps on undergraduate numbers. British universities have enjoyed a bonanza of expansion and construction.

New halls of residence have sprung up, as universities competed to attract students through en-suite bathrooms, gleaming sporting facilities and libraries, alongside the coffee bars and Wi-Fi hotspots that have replaced bars as social hangouts and resulted in plummeting student union income from alcohol sales.

“There are some universities that seem to be pretty exposed in terms of their debt position. There are some that are mortgaged up to the hilt, and that’s dangerous stuff. I wouldn’t want to be their vice-chancellor,” said one university leader.

The more vulnerable institutions will be looking nervously at the higher education bill and the prospect of more competition in the form of a new wave of entrants the government says it wants to encourage.

But Simon Gaskell, the vice-chancellor of Queen Mary University London, a member of the Russell Group of research-intensive universities, says the bill contains a huge risk for the whole British higher education sector.

“We live with cut-throat competition at the moment, so that isn’t the issue,” Gaskell said.

“The UK has a very high reputation that has been established over decades and hundreds of years. It will be lost in a matter of months if we get this wrong, designating as universities or giving degree-awarding powers to institutions which are fly-by-night or low-quality. That is the most insidious problem.”

Gaskell said the move to allow universities unlimited recruitment has also injected a new risk in competing for the same pool of applicants.

“For example we had one year when one of our major London competitors suddenly decided they would massively increase their recruitment in a couple of areas,” he said.

“Students who had slipped a grade were suddenly being accepted by this competitor university, so their recruitment shot upwards and ours was under pressure. This was the sort of factor that we didn’t have to worry about previously, because that competitor institution had a cap on their numbers, as did we, so they couldn’t increase their numbers.

“We have a situation now where everything we do is risky. That might be appropriate, healthy and bracing, but it does give the lie to suggestions that universities exist in this cocooned existence where the vast majority of their funding is predictable.”

Husbands argues that despite the recent expansion, with only 37% of British school-leavers going to university there’s still room for future growth.

“There’s no reason to suppose 37% is a ceiling. The market has been expanding, and there is no reason to suppose that in the UK is it at saturation point, because it isn’t in other countries,” he said.

For many universities, any plans for expansion could be constrained by the Tef, which seeks to rate every university on a combination of metrics from student satisfaction surveys, employment destination and degree completion data. While universities have had decades of experience in having their research output evaluated, the Tef is the first systemic effort to gauge teaching outcomes.

A woman cycles past Cambridge University’s Senate House. There are fears that UK has a very high reputation that has been established over decades and hundreds of years. It will be lost Photograph: Brian Harris/Alamy

Wyn Morgan, pro-vice chancellor for learning and teaching at the University of Sheffield, said there was no argument over efforts to improve teaching and raise standards, but questioned whether the data being used was the right way to do it.

“The Tef is the biggest issue on my desk. We’ve not got clarity on it yet, we haven’t got Tef data yet so we don’t know what it looks like,” Morgan said.

“It was supposed to be coming out in September but we’ve still not had it. It’s really uncertain territory. We’re not against the notion of raising standards but the way they are trying to metricise it is really tricky.”

Several universities are said to be unhappy enough that they are considering opting out of the Tef second stage, a move that would see their fees revert back to £9,000 rather than rise with inflation. But others have gone ahead and announced higher fees, despite the uncertainty.

Nick Hillman, a former government special adviser and now head of the Higher Education Policy Institute thinktank, said that university finances remained healthy. “The sector needs to be careful about crying wolf,” Hillman said, arguing that the effects of the changes and Brexit, while difficult, were not insurmountable.

But Gaskell said of a meeting with his Queen Mary’s colleagues: “I found myself saying at the beginning of an open meeting: ‘We live in times of unprecedented uncertainty in the university sector’. But I thought, can I really keep on saying this? But yes I can, clearly it’s the case with Brexit and the Tef but it was the case last year. The uncertainty is ramping up.”