Higher Education Today – January 2024

Welcome to the winter edition of Higher Education Today, looking at current topics and questions facing higher education.

In each edition we feature content from key members of our Higher Education legal and regulatory team. If you would like further details about these individuals or information about the wider Higher Education team please see our Higher Education brochure.

We are delighted that in this edition the core members of our Higher Education team have shared with HE Today their predictions for key Higher Education trends, as well as considering what challenges and opportunities may lie ahead for Higher Education Institutions in 2024.

We hope you find the newsletter interesting and helpful.

Virginia and Ashley
Joint Department Heads for Higher Education

Our Higher Education team share their 2024 predictions for the sector

Ashley Norman, employment partner and co-head of our Higher Education team, Anne Palmer, employment legal director considered the employment challenges for Universities in 2024

The main employment challenges for Universities are likely to continue to revolve around staff morale and staff employee relations cases. Some Universities may be facing further industrial action over the 2023-24 pay uplift, and if further action takes place, those Universities are likely to see an increase in student complaints and possibly staff grievances.

Universities are also set to experience further challenges as a result of a flurry of legislative changes. In October 2024, there will be a new employer duty to take reasonable steps to prevent sexual harassment in the workplace. Since the #MeToo movement Universities have been striving to create a safer and more transparent working culture, but this new legislation means they will need to take proactive steps to update policies, possibly carry out risk assessments and provide sufficient training to ensure compliance. In addition to this, Universities will also be grappling with the increased obligations to protect and promote free speech and academic freedom, which is likely to create turbulence when trying to strike a fair balance between conflicting views.

There are also a number of other changes afoot that will be keeping University HR professionals busy, including the right to request flexible working from day one, increased protection for women (in connection with pregnancy, childbirth, or maternity), the ability to request a more predictable work pattern, changes to holiday pay calculations as well as enhanced rights for eligible carers.

Tijen Ahmet, legal director and head of our immigration practice reflected on the immigration challenges for Universities in the year ahead

The UK Government’s pledge to reduce net migration has introduced significant measures, including restricting international students from coming to the UK. Despite the commitment to the International Education Strategy: global potential, global growth aimed at increasing the numbers of international students studying in the UK to 600,000 per year by 2030, recent immigration measures effective from 2024 means that the balancing of these two conflicting commitments will bring challenges for the Higher Education sector.

Restrictions on family members joining students, switching into work routes and visa fee increases is likely to impact on the attractiveness of the UK as a destination for international students. In addition, under new plans to increase minimum salary threshold by over 60% in spring 2024, Universities will face further challenges with recruitment of skilled academics who may no longer qualify for sponsorship under the new regime. 

Tijen will discuss how HEIs can balance these conflicting demands at our upcoming webinar on 20 March. 

Harriet Murray Jones, renewable energy and property law partner, shared her thoughts on what lay ahead for Universities’ energy and resource management teams in 2024

The environmental sustainability of HEIs continues to be a key issue, both for the institutions themselves and also for their students and prospective students. With the UK's target to reduce carbon emissions by 68% by 2030 (compared to 1990 levels) only a few years away, most, if not all, HEIs have set out their net zero ambitions which are supported by a clear, climate action plan. But, at a time when higher education funding is already stretched, ensuring there is budget available to achieve these goals is a careful balancing act.

Helpfully British Universities Finance Directors Group, together with AUDE (the Association of Higher Education Directors of Estates) and the EAUC (the Alliance for Sustainability Leadership in Education) have launched their Cost of Net Zero Calculator tool, which helps institutions to better understand their cost levels and estimated carbon reduction achievable across the three categories of supply chain, built environment and travel/transport.

There is no ‘one size fits all’ solution for HEIs to decarbonise. Factors such as location, current estate, demographics, supply chain, and of course, funding, all have a major influence on the feasibility and business case for various options. We will be looking at some examples of how HEIs have started on their path to net zero at our upcoming webinar on 13 March.

But as HEIs start to get to grips with scope 1 and 2 emissions, perhaps most challenging will be the scope 3 emissions - those emissions produced up and down the supply chain for which the institution is not directly responsible. Given the reliance that many HEIs have on international students for funding, (see the immigration horizon scan above), reducing carbon emissions from international travel will remain a difficult dilemma to grapple with.

Rachel Soundy, corporate partner, shared her thoughts on the national and international higher education landscape in 2024

In last year’s HE Today horizon scan I predicted that the financial pressures faced by many UK Universities would result in increasing numbers of teaching and research collaborations and transnational partnerships. As 2023 unfolded this prediction undoubtedly proved correct. 2024 will see more joint ventures and collaborations across the Higher Education sector – particularly in relation to attracting postgraduate international students.

Challenges across the sector relating to income generation, increasing pressures on base costs and estate investment requirements will make 2024 a challenging year for University finances – as a result partial mergers and alternative delivery models will continue to be considered by Universities as a means of diversifying income streams.

Virginia Cooper, partner and co-head of our Higher Education team reflected on regulatory and student related issues for HEIs in the year ahead.

From a student perspective, one of the major challenges for Universities in 2024 will be attracting and retaining students in a competitive market by continuing to offer hybrid modes of learning, shorter and more flexible courses and promoting access, equity and inclusion through a range of financial support and improved student engagement and satisfaction. 

Linked to this, the focus on handling student disciplinary hearings including those involving allegations of sexual misconduct either by or against students will continue to raise complex issues around consent and legal representation with the direction of travel continuing towards increased formality in the process.

Higher Education Providers will also need to get to grips with the ‘enhanced’ duties to protect and promote free speech ‘within the law’ introduced by the  Higher Education (Freedom of Speech) Act 2023 including changes to registration conditions, increased OfS oversight, reviewing their codes of practice setting out their values and procedures and the potential costs associated with claims including enforcement of the new statutory tort and complaints to the OfS free speech complaint scheme, predicted to be in force in August this year.

Mark Paget Skelin, property partner, and Niamh Batterton, construction legal director, considered the property and construction challenges facing Universities in 2024

From a property perspective, there will be increased challenges and pressures for Universities to rationalise their estates, including a greater focus on surplus land or properties which are no longer required for use by a University. Typically, these areas could include smaller island sites away from the main campus, such as single residential houses or office space which are no longer used or are permanently underutilised, and where a significant and potentially welcome capital receipt could be generated in respect of the sale of the surplus land. A further benefit is that this could also cut down on the University’s ongoing maintenance liabilities, particularly for properties with significant backlog maintenance issues.

From a construction perspective, the ongoing scarcity of skilled workers will continue to be one of the leading causes of construction defaults, including scheduling and costs overruns and increased on-site injuries. This will have a potentially significant impact on higher education construction projects. Whilst advances in technology are helping to offset some of these challenges, the pace in advancement of technology may not be enough to meet increasing construction demands.

There will remain challenges relating to the costs of materials, with the supply chain still yet to recover from the impact of Covid-19. Various material prices remain inflated as a result and there are no clear indicators as to when they will decrease.  Such increases have and will continue in 2024 to have a ripple effect causing delays and possibly employers using less experienced contractors, causing further issues.

Louise Mansfield, health and safety legal director, shared her thoughts on building safety considerations for Universities in 2024

From April 2024, the Building Safety Regulator will start checking the compliance of higher-risk buildings with the requirements of the Building Safety Act 2022. Higher-risk buildings are those that are at least 18m / 7 storeys and contain residential units (specifically including student accommodation). Such buildings should have been registered by 1 October 2023. From April 2024, the Building Safety Regulator will be inviting those responsible for these buildings to submit an application for a Building Assessment Certificate. Documents will have to be sent to the Building Safety Regulator to evidence how Accountable Persons are managing their building safety risks and keeping residents safe. The Regulator will examine these documents and may send an inspector to the building to verify the Accountable Persons’ arrangements for managing building safety risks. If satisfied, the Regulator will issue a Building Assessment Certificate for the building.

The UK Government is continuing its push to increase the uptake of occupation health through “an ambitious and wide-ranging package of new measures worth over £2 billion”.  Responses to consultations that took place in 2023 are expected to be published in 2024. The Departments for Work and Pensions and Health and Social Care consultations looked at: a new voluntary national health at work standard for employers that embeds a baseline for quality OH provision to which employers can accredit; “best practice” models that would promote better health support in the workplace; consolidating guidance on workplace health provision for employers, including defining a simple and clear baseline for OH provision for all employers, particularly SMEs; and additional government-funded support to enable businesses to work towards the standard. HM Treasury sought views on further tax incentives to encourage employers to provide OH services to their employees and looked at expanding the Benefit in Kind exemption for medical benefits. 

Nigel Bolton, partner and head of pensions, reflected on what the pensions landscape looks like for Universities in the year ahead

The main challenges for University pensions in 2024 will relate to the contributions “merry go round”. USS employee costs are to fall from Jan 2024 to 6.4 % and employer rates to 14.6 % (from 22%) with 2018 level benefits to be restored by April 2024 - this will see the ending of 69 days of strikes in the last 4 years in the sector around pensions.

Teachers scheme contributions for employers are increasing 5% to 28.68 % from April 2024, so cost savings will need to be made somewhere to afford this - the impacted Higher Education Institutions are the circa 80 Universities who offer TPS membership to academic staff.  

Elizabeth Dunford, IT and data protection higher education specialist, considered the data protection challenges for Universities in 2024

As we move into 2024 and enter further into the brave new world of fast-paced technological developments, Universities will need to continue to keep data protection and “privacy by design” at the forefronts of their minds. Cyber-security will remain a hot topic, particularly as Universities start to utilise AI and learner analytics tools which collect large volumes of data which must be kept secure. Universities will also need to consider how best to meet the rights of their data subjects as they adopt new technologies. Explaining complex processing activities transparently, particularly where Universities are using AI, will continue to be a challenge.

We will also see the Data Protection and Digital Information Bill continue to make its way through the Houses of Parliament, and Universities will need to consider what, if any, impact this new legislation might have on their approach to data protection.  Finally, with the newly established “Data Bridge” between the US and the UK, Universities will need to consider their approaches to international transfers, particularly whether they wish to rely on the “Data Bridge” which is likely to be subject to intense scrutiny and challenge.