Children & Young People Committee FURTHER & HIGHER EDUCATION

Democratic Services ITEM 6

Children & Young People Committee

FURTHER & HIGHER EDUCATION IN

MILTON KEYNES

A Draft Report for Consultation on MK:U

September 2017

http://www.milton-keynes.gov.uk/your-council-and- elections/councillors-and- committees/overview-and-scrutiny

INTRODUCTION

1 At its meeting on 8 February 2017 the Committee considered the development of further and higher education in Milton Keynes. The immediate impetus for this was a request for further information about the re-location plans of the Milton Keynes College of Education from Bletchley and Leadenhall to the city centre. But we were also aware of mounting concern within the University of Bedfordshire about its relationship with the Council in the light of Project 2 (MK:IT) of the 2050 Futures Commission. The University of Buckingham’s new academic centre was becoming visible on a prominent site alongside the Hospital. And it is the Committee’s policy to re-visit the outcomes of previous discussions within a year to see what has been achieved – in this case its report on post-16 options for continuing learning in Milton Keynes of July 2016.

2 Those presenting on 8 February included Dr Julie Mills, Principal of the College with her colleague Mr Jeremy Wilsdon, Dr Gordon Mellor, Director of the University of Bedfordshire’s Milton Keynes Campus (UCMK) and Mr Geoff Snelson with Dr Nick Gough on behalf of the Council and Cranfield University whom the Council had commissioned to prepare the business case for the MK:IT project. We are very grateful to all of them for their comments and advice.

3 It had been intended to present this report for the endorsement of the Committee at its meeting in May. In the event that meeting was postponed on account of the general election and is only now being held on 12 September. The opportunity has been taken therefore to update the presentations in three respects: (1) The College of Education – which had been in Wave 5 of the Government’s review of post-16 education and training institutions was informed in March that it would not be required to merge with any other college. The object of the review had been to promote such mergers as a move towards greater financial resilience and over 50 have been instigated. (2) The University of Bedfordshire has announced its decision to dissolve the formal aspects of its partnership with the Council while continuing to work together on a voluntary basis . (3) Cranfield and the Council have published their business plan for MK:IT (now called MK:U) and the Council plans to go out to tender for a higher education institutional partner to take the scheme forward at the Cabinet Procurement & Commissioning Committee on 14 September.

4 After a brief survey of previous attempts to establish a university within the city (paragraph 5), a summary of the current providers (paragraph 6) and reference to the national situation (paragraphs 7 - 9) the report will consider the MK University business plan and make recommendations (paragraph 10 onwards).

PREVIOUS AND CURRENT PROVIDERS

5 The MK:U project shortly to go out to tender is the sixth attempt to establish a university within Milton Keynes:

(1) Leicester Polytechnic (then about to become de Montfort University) established a campus at Kents Hill in 1992 but closed it in 2003 when de Montfort reversed its strategy of operating through a number of sub-regional centres and consolidated on its Leicester campus. (2) Subsequently a group of local institutions formed Universities for Milton Keynes (U4MK) within the Economy and Learning Partnership and under the auspices of the then Local Strategic Partnership’s 2005 Community Strategy. However this did not come to fruition after the Open University withdrew from active membership. (3) In 2008 Milton Keynes College entered a partnership with the University of Bedfordshire to provide franchised higher education courses at a new University Centre Milton Keynes in the city centre (UCMK). Both institutions still cooperate but the College's worsening financial situation limited the amount of resource that it was able to provide. (4) Two years later Dr Terence Kealey, then Vice Chancellor of the University of Buckingham and aware that his university had no physical room to expand, bruited the possibility of a second campus in Milton Keynes. These specific plans were not proceeded with but laid the foundation for Buckingham’s later partnership with Milton Keynes Hospital. (5) Meanwhile in 2012 the Council and the University of Bedfordshire re-launched UCMK (now rebranded as Campus rather than Centre) on the basis that the Campus would eventually become a free standing university with 1.000 students by 2015 and 5,000 by 2025. .

6 Partly as a consequence of these previous initiatives there are now already a number of higher education providers in Milton Keynes. (1) The Open University is the most notable but has no residential students other than some in its PhD programmes. (2) As already noted the University of Buckingham is in partnership with Milton Keynes University Hospital where its £6 million academic centre will open later this year. The University offers postgraduate MD programmes for qualified doctors in a range of specialisms as well as the undergraduate MBChB. From 2019 the Hospital will be offering courses for some of the allied health professions validated by a number of providers. (3) Milton Keynes College offers university level qualifications including HNCs, HNDs and Foundation degrees (in which there was increasing interest). (4) The University of Bedfordshire is a key stakeholder in MK:Smart which is developing innovative solutions that support economic growth, and has expanded its formal curriculum into practice based learning. (5) Both Two Mile Ash and Denbigh are teaching schools accredited to offer SCITT (school centred initial teacher training) courses, including a postgraduate teaching qualification.

(6) The British BPP University and Kaplan (accredited in America) offer courses in the city centre leading to Accounting qualifications. BPP also offer Law and Business courses although not yet in Milton Keynes.

THE NATIONAL PICTURE 7 The Higher Education and Research Act was passed by Parliament in April just before the general election. These are its main provisions: (1) A new regulator and funding council for universities, entitled the Office for Students, will be set up next year. OfS will hold the statutory responsibility for quality and standards, approve new entrants to the sector by managing the Register of Higher Education Providers, and also the awarding of university title and degree awarding powers. (2) The OfS will be empowered to make arrangements for assessing of the quality of teaching in universities, in an exercise currently branded as the Teaching Excellence Framework (TEF) whch is already underway. Its first results were released in June), rating universities as Gold, Silver or Bronze. It will be reviewed independently by the end of 2019. (3) Until 2020, the government is expected to allow tuition fees to increase by the rate of inflation for universities participating in TEF and meeting minimum eligibility requirements. After 2020, this can be linked to results in the TEF. (4) The OfS will be able to designate an independent body to carry out its statutory duties in relation to quality and standards. (5) The OfS will also incorporate the functions of the Office for Fair Access. Universities will be required to publish information on the fairness of their admissions, and also information that could be considered “helpful to international students”. The OfS will also have powers in relation to monitoring the financial sustainability of higher education providers, and improving their efficiency. (6) Universities will now be able to charge higher annual fees for courses that are taught over a shorter period of time, also known as “accelerated degrees”. The Student Finance Company will be enabled to make alternative methods of financing available for those unable to take out students loans, particularly for those who require ‘Sharia-compliant’ finance. (7) The seven research councils, Innovate UK, and the research functions of the Higher Education Funding Council for England (HEFCE), will be brought under a “single strategic research body”: UK Research and Innovation (UKRI). The research councils will maintain their existing composition within UKRI, but be subject to a single accounting officer. They will continue their existing duties, with added responsibility for interdisciplinary collaboration. A new body, Research England, will be responsible for quality-related (QR) research funding.

8 Other national and international factors to be taken into account include; (1) Demographic trends, which show a decrease of 10% in the number of UK 18 – 20 year olds between 2014 and 2021 followed by an increase of 19% from 2021 to 2030. EU applications have declined by 7% in for 2017 entry. Students from non EU countries have constituted c. 13.5% of enrolments over the last three years coming predominantly from five countries. In four of these (India, Malaysia, Nigeria, and the United States) the number of young people between 18 and 24 is projected to grow but in China a steep decrease is forecast. In all non EU countries UK government policy on the issue of student visas is a consideration.

(2) Economic trends which suggest a slowing down of the UK economy. Data from previous downturns show that demand for undergraduate study tilts towards full-time rather than part time courses on account of the lower cost of forgone income. (3) Recent speculation about the future structure of student loans. The removal of the government cap on student numbers (and fines for exceeding the cap) when fees were increased to £9,000 means that universities now have a financial incentive to recruit as many students as they wish and can.

(4) Long term projections in the UK labour market demonstrate the likely growth in the private sector such as professional services and IT, in construction and in the health and social care sectors; and that the largest share of growth is anticipated to come from the high-skill rather the low skill end of the labour market. Current analyses suggest that there is an undersupply of students with higher level qualifications (not necessarily graduates) relative to the number of jobs demanding them.

9 This extent of this mismatch between supply and demand is likely to impact on further education as students assess more closely than before the level of qualification they need and in what subject areas. The Government announced in March this year a major reform of technical education replacing 13,000 qualifications with 15 T-Level “routes” linked to the needs of employers. This will be backed by an investment of an extra £500 million p.a. so that the training available for 16 – 19 year olds will increase by 50% to 900 hours per year. Over 30 universities are already offering degree apprenticeships (including Cranfield in Defence) or planning to do so. Many are looking to strengthen their relationship with further education colleges.

MK:U

10 The Council has approved Project Two of the Futures Commission report for an MK:IT that would “provide lifelong learning opportunities at a new university to promote research, teaching and practice which provide realistic solutions to the problems facing fast-growing cities everywhere.” At its meeting in June 2016 the Committee received a summary of Futures Commission Working Paper no. 16 which formed the basis of the proposal in Project Two above. The Working Paper summarised its assessment of the present position in higher education as follows:

(1) A likely increase after 2020 in overall student numbers, (2) The lifting of student number controls by institution, (3) The removal of barriers to the establishment of new universities, (4) The impact of (2) and (3) in creating a higher education “market” (5) Innovations in learning and teaching, (6) The role of universities would encompass creating students equipped for lifelong employability and (7) There was an opportunity for “triple-helix” collaboration between universities, industry and civic authorities.

Against this background the paper proposed an “MK:IT” that would operate very differently from conventional universities building on four platforms as below: (1) portfolio learning, providing life-long learning opportunities for everyone from school leavers to in-career professionals integrating cross-disciplinary learning with real world problem-solving. (2) living lab research engaging with the city as a living laboratory for developing and testing new thinking in five thematic areas namely mobility & logistics, health & wellbeing, urban living, creativity & design and enterprise. (3) learning partnerships through relationships between employers, learning providers and the public sector to develop a future looking labour force working within innovative businesses. (4) creative place making including a vibrant ‘village’ in Central Milton Keynes responding to an objective of the CMK Neighbourhood Plan which aspires to a university that will develop small businesses and act as a magnet for entrepreneurs.

11 The MK:U Business and Development Plan prepared by Cranfield University in partnership with the Council is based on these original proposals adjusted in the light of subsequent consultations following extensive engagement with local stakeholders, including dedicated workshops with local employers, schools and colleges and a survey of local sixth formers. Discussions were also held with elected members and officers of the Council. The Committee is very supportive of the vision of a new university for Milton Keynes, but anxious that it should not simply become the United Kingdom’s 130th university. We therefore welcome the very clear statement in the Business Plan that MK:U should have a distinctive curriculum, a new style of learning, iconic buildings and be closely related to the vision of Milton Keynes as a Smart City. Copies of the Business Plan are available on line at http://mkfutures2050.com/images/pdfs/MKU-brochure-07-06-17-FINAL-reduced.pdf or by request to [email protected].

12 In summary the Plan recommends that the Council appoint a Higher Education Lead Institution (HEI) by early 2018 following a competitive tender to be launched in September (Year -4). Years -3 to Year 0 are spent planning, building and marketing. The first students will be admitted in Year 1 (October 2022). Making the right choice will be crucial to the success of the project as a strong “brand” will be necessary to launch an institution which will have none at the outset. The appointed HEI will also need academic expertise in the proposed curriculum as it is likely to be awarding MK:U’s first degrees in the early years while the new university awaits formal degree awarding powers.

13 The Plan proposes that MK:U should offer courses within the following subject areas (faculties);

Business  Business & Management  Entrepreneurship Applied Creativity & Innovation  Product design  Graphics

Digital  Digital science & computing  Analytics and big data  Cyber Smart cities  Urban planning, urban living and design, architecture  Transport futures, Intelligent Mobility, Autonomy  Energy & Environmental sciences  Sustainability and Circular Economy Technology and engineering  Engineering  Manufacturing  Robotics  Materials science & bio mimetics

14 Two kinds of first degree format are proposed Full time for 3 years A 45 week year delivering 90 weeks of academic study over 3 years but creating space for students to work on internships or placements during their studies. Full time for 2 years A 45 week year delivering 90 weeks of academic study over 2 years accelerating students into the workplace. Students may also be able to study part time, including for degree apprenticeships and – later - for masters’ degrees. Learning will be achieved through problem-based study (involving business issues, blended learning (partly on-line), learning portfolios used as part of the degree assessment to demonstrate practical attainment, and peer coaching.

15 Key to the success of the institution will be student enrolments where three scenarios are reviewed: An optimistic scenario: 6,169 full time students + 1,975 part time = 8,144 in Year 5 An average scenario: 3,921 full time students + 1,185 part time = 5,106 in Year 5 A pessimistic scenario: 1,903 full time students + 395 part time = 2,298 in Year 5

16 These numbers inform the Business Plan’s financial projections for student income from the launch date of October 2022 (Year 1) as follows: Optimistic: cumulative deficit Years 1 – 5 = £6.8m but in surplus after Year 3 Average: cumulative deficit Years 1 – 5 = £22.5m but in surplus after Year 3 Pessimistic: cumulative deficit Years 1 – 5 = £57.1m and not yet in surplus.

The Plan assumes that the land for MK:U (site B4 by the station is proposed in Plan:MK) will be made available initially at zero cost in the light of the economic benefit it will bring to the city. Initial build costs have been assumed at £200m excluding VAT. This figure reflects current higher education building norms – should a higher specification be required costs will rise. A commercially negotiated PFI arrangement is seen as the most likely source of this funding.

Staff running costs are fixed at £4.2m for each of the five lead-in years to October 2022 and then at £6.3m in Year 1. Thereafter they vary depending on student enrolments. In Year 5 they range from £10.6m for the Pessimistic scenario to £31.3m for the Optimistic.

The overall profit & loss accounts (£000) are projected as follows

Set up Year 1 Year 2 Year 3 Year 4 Year 5 OPTIMISTIC Income 0 21,173 40,128 62,398 82,589 97,009 Expenditure 7,859 29,290 47,371 65,231 77,759 82,558 Surplus/(Deficit) (7,859) (8,117) (7,243) (2,832) 4,829 14,451 AVERAGE Income 0 16,663 28,393 42,181 54,667 63,567 Expenditure 7,859 27,784 37,662 47,097 52,322 55,299 Surplus/(Deficit) (7,859) (11,121) (9,229) (4,916) 2,345 8,268 PESSIMISTIC Income 0 12,633 18,164 24,532 30,195 34,209 Expenditure 7,859 26,438 30,194 35,229 37,840 39,234 Surplus/(Deficit) (7,859) (13,805) (12,030) (10,697) (7,645) (5,025)

The overall balance sheet shows a deficit (£000) after Year 5 for all three forecasts as follows: Optimistic: (6,770) Average: (22,511) Pessimistic: (57,059)

CONCLUSION 17 As already indicated the Committee is fully committed to the vision of a university in Central Milton Keynes and supportive of the aspiration of Milton Keynes College also to re-locate to the centre. We are conscious that the Business and Development Plan is not intended to be a restrictive document as interested institutions will wish to have some flexibility in developing realisable propositions. The comments below are not intended therefore to place additional requirements on the project but simply to open up discussion.

18 There is much that is appealing in the Business Plan including its deliberately constrained subject choice, the 2 and 3 year degree course structure, new staffing models, the proposal for iconic buildings in an otherwise somewhat bland architectural setting, and the concept of “porosity” as a means of fully integrating the life of MK:U with that of the city and borough. In respect of porosity however we have some concerns about its implementation. The Plan refers to a university precinct that would encompass – for example - student accommodation and specialist retailers. Care will be needed to ensure that the campus does not become a self-contained unit like many of the new universities established in the mid-sixties. We would prefer that the facilities which students use should be spread throughout the city centre. This would locate young people closer to the existing retail and leisure facilities within CMK rather than some distance away.

19 We welcome the range of subjects offered in the Plan but note that one innovative area not included is that of advanced medicine including – for example – molecular medicine, genetics and neuroscience. Similarly we welcome the emphasis in the Plan for subjects that are relevant to business (and the evidence cited of a warm business response) but note that one of the major employment shortages in Milton Keynes is that of teachers. We suggest that an additional internship programme might be created with one of the SCITT teaching schools (see paragraph 6.5 above) for students who wish to teach.

20 We would urge caution about the projected student numbers and are pleased that the original projections of 10,000 students have been scaled back. The current forecast ranges are based on evidence that applications have remained relatively buoyant in the subject areas that MK:U will be concentrating on. While this is true other universities will be reviewing the same data and seeking to expand their numbers in similar disciplines as is already hinted at in the Business Plan’s competitor analysis. Additionally the current demographic and economic situation (see paragraph 8 above) raises questions as to whether even the average student number forecast is achievable within the target five year time span – although we accept the improving scenario foreseen for after 2020. The Plan notes the importance attributed by university applicants to ranking tables – this will cause difficulties for new institutional entrants or others who for technical reasons are excluded. We were strongly advised by participants at our July 2015 meeting, particularly the head teacher of Denbigh School, Mr Andy Squires that the Amazing- MK brand had not been able to overcome a national perception – however unfair – of Milton Keynes’ lack of a specific “offer” for potential new students and graduates in respect of purpose built accommodation and those sporting, cultural and leisure activities that have traditionally supported student life. At the Committee’s meeting in July this year representatives of the Youth Cabinet also pointed to the cost of local travel as an inhibiting factor to their enjoyment of Milton Keynes. With alternative university places now so widely available – there were 60,000 applicants in Clearing in 2016 – these non-academic considerations assume a greater importance.

21 We regret how little reference is made to Milton Keynes College in the Plan which does not fully reflect the way in which the relationship between further and higher education is changing through – for example – designated entry pathways or local credit transfer schemes.

22 The Business Plan cites a number of international universities with which MK:U might be compared but omits what is surely its best comparator – the California Institute of Technology (CalTech) in the United States, widely regarded as second only to the Massachusetts Institute of Technology (MIT) but with a deliberately much narrower subject range and only 2,240 students.

23 Given the risk of failure, or at least of slower than forecast growth, our advice to the Council is that it should not assume any of the financial risk itself. We would also advise continued monitoring of MKDP’s agreement to the use of the CMK B4 site for the University subject to an appropriate transactional structure. And we would endorse the Business Plan’s caution in respect of commercial investors who might re-direct the project away from its Milton Keynes ethos, or act in such a way as to offend the tenets of academic freedom.

24 The Council should also consider alternative arrangements in the event of the current proposals faltering along the way. It is not unusual for a major city to have more than one university - both Liverpool and Birmingham for example have three. Milton Keynes has two university campuses (but not universities) already here from external providers (Buckingham and Bedfordshire) and Cranfield is a de facto third, together with the College. Should it be necessary therefore the opportunity exists to seek the creation of a federal Milton Keynes University based on these providers and offering the full range of university subjects from Humanities through the social and professional disciplines to Medicine, supported by the College offering vocational degree level qualifications. Long term arrangements would need to be put in place for revenue sharing when the federal university became fully independent, but there are precedents for this. Milton Keynes cannot be left without its own university.

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