Malcolm Grant on Higher Education’s Challenges: Getting Smarter About Costs, and Increasing Intellectual Collaboration

Higher learning institutions around the world that depend on public funding have keenly felt the pinch of the global economic crisis. With 8000 in staff and 25,000 students, The University College London president and provost Malcolm Grant faces problems of scale, but has managed to navigate choppy waters in the last couple years to keep his renowned research institution running at world-class standards.

For Grant, the recession has proved to be a teachable moment, not just in how universities must run a tighter ship, but also in forcing them to fundamentally rethink how they approach research and their commitment to answering the biggest contemporary questions. Even with the added financial pressure UCL has embarked upon expansion into the Gulf, recently opening a campus in Doha funded jointly by the Qatar Foundation and the Qatar Museum Authority.

In a discussion with Arabic Knowledge@Wharton during Abu Dhabi’s Festival of Thinkers in November, the UCL president explains how he weathered financial strains, why universities need to collaborate more, and how the school has built institutional ties with the Middle East and North Africa.

An edited transcript of the conversation follows.

Arabic Knowledge@Wharton: How did the global economic recession affect higher education in the U.K., and in particular, UCL? Did it impact your research budget and tuition structures?

Malcolm Grant: I think we had a strange sort of period because of politics, so in the run-up to May 2010 when the general election took place, none of the political parties were willing to confront the extent of the recession in the U.K. None of them really was wiling to outline what their economic policy would be post the general election; everybody was aware there was going to be austerity. The great concern for the universities was that the two main political parties, Labor and Conservative, both agreed that there would be a need to significantly reduce the deficit — ultimately by 50% over four years — and both parties seemed to be roughly aligned on that.

Secondly, both parties seemed to be aligned on the expectation that they would protect certain areas of public expenditure from that process, including the National Health Service, aspects of the military, and secondary schools. But the more they pledged to protect, the more vulnerable became the position of the universities. So we were at one stage modeling potential funding reductions of between 10 and 25%; certainly if you talk about it in real terms, we could see it as being as much as 25%. So that was a very worrying time for all of us.

With the general election there was an interim budget in May-June 2010, and we set about lobbying very hard for the future of higher education, because we could see it being really seriously damaged by these proposals. Ultimately, the coalition government came to a compromise. They did two things: One was to commit right at the last minute to protecting research; we had been used to steady increases in research funding for the past decade at 2% above inflation. They withdrew that but they undertook not to take any cash out of research. They gave us a flat-cash budget for four years, a big change in what’s been a very dynamic research environment. But it was so much better than what we had contemplated that it was something we were willing to live it. And it sharpened our sense of competitiveness and we hope still to be strong in research. Alongside that on the research front, we have a very strong charitable research program in the U.K., but the returns on their investments have also declined with a drop in interest rates and stock market returns, so that’s also been tight.

The other part of the package was student tuition, and this was the most dramatic change, shifting the long-term burden of student tuition from the state to the student. By long-term we mean over as long as 25 years, because in the new packages, students will pay a fee set by the university up to £9,000 (US$14,000), and most universities have the full amount because that’s equivalent to the amount of money the government took away. And secondly, the payment is not made up front by the students, it’s made out of earned income once they graduate, and the requirement to pay a contribution kicks in only once the student is earning £21,000 (US$33,000) a year and reaches its maximum rate, which is 9%, once a student is earning £42,000 (US$65,000) a year, which is quite a reasonable income. So that’s been a hugely controversial program, there have been student protests and occupations all over Britain.

The consequence for the universities has been relatively benign, because it’s meant that the tuition fee is paid by the student loan company rather than by the student individually, but it does mean that universities do need to compete for students. And if a university’s student numbers fall short of what they used to, then there’s going to be attrition on budgets. So we won’t know that for another year, when students come in under the new system, that we will be able to see whether there’s been a reduction in the propensity of students overall who go to university. And if so, whether some universities will be hit harder than others.

We’ve also lost most of our capital funding. And that’s very difficult if you’re trying to maintain world-class research facilities. So we have to budget to generate capital out of income and we have to be able to borrow and to look at new ways of financing new projects.

Arabic Knowledge@Wharton: How do you respond to students’ concerns over the new burden of tuition?

Grant: Our best response to it is to make sure that we don’t make it difficult for students who come from less well off backgrounds to get to university. So one-third of the additional fee income that we’re getting, we’re putting into bursaries, which will be available to such students. We’re also working really hard to try and attract the brightest and the best. One of the things that we’re doing that nobody else is doing, we’re starting a high school, which will open its doors next September and will take students from all backgrounds, because one of our big problems in the U.K. is we have some of the best high schools in the world, and some of the worst, and it’s very tough for kids from a disadvantaged background, in a disadvantaged area, to get a high quality secondary education. If you’re not getting a high quality secondary education, then you’re not going to get into a top-ranking university.

For our students the real challenge has been the pace of change. Had the government phased [the tuition increase] in over a three, four or five year-year period it wouldn’t have provoked the same level of protest as it has. From no fees in 1997, to a fee of £1,000 (US$1,500) a year in 1998, then a fee of £3,000 (US$4,700) a year in 2006, payable after graduation, to £9,000 (US$14,000) a year in 2012, payable after graduation. It’s a very steep increase.

Arabic Knowledge@Wharton: You’ve had to come up with some alternatives and other funding streams, so where does UCL stands financially at this point and where do you see the institution in the next five years?

Grant: These things are all a bit relative. I suppose we start by saying we will be better off than others, for a number of reasons. The first reason is that we have students in a number of different categories, so we’re about 45% postgraduate student body now, so those students are not affected, at least yet they’re not affected by any new tuition regime. In four years’ time, they will be because they’ll have come through that different regime.

Secondly, international students — we’re about 30% students from outside the EU and that’s a very important figure for us because it allows us to maintain that area of our activity where demand is growing. Indeed, figures for applications for next year shows us up by about 10% on international applications, while national applications are holding flat. So that gives me some reassurance that we have these in different pots.

Thirdly is the question of research money, and that is a much bigger income stream to us than tuition. So balancing all of these together, we are still forecasting an ability to operate in surplus. It’ll be marginal, it won’t be straightforward for the next two or three years. But I’m sleeping better than I was 18 months ago, when we were facing those potential cuts that I’d mentioned earlier.

Arabic Knowledge@Wharton: What place or purpose do you envision universities will have in this new century? Is there room for innovation in methods of higher learning and research?

Grant: It is still very interesting to me that when the queen asked — at the opening of a new building at the London School of Economics — why nobody saw [the global recession] coming, nobody could answer. There isn’t a glib, simple answer, we know that, but it was the fact that not only hadn’t we seen it coming, we actually hadn’t thought about it in sufficient depth. Now the academics who couldn’t supply the answer that day, actually then did write a paper and sent it to the queen a few months later with some of the answers. There are a huge number of interdependencies and variables and there are factors which are not purely objective and measurable; there are factors of human psychology and who relied upon who and the whole collapse of Lehman Brothers — if you read the book Too Big to Fail you can get a sense of how volatile it was day after day, and even the collapse of Lehman Brothers was not a foreseen outcome until the very day when it happened.

But it does beg the question, what are universities for? We’ve been outstandingly successful institutions in discovery and innovation and in dissemination via generations of undergraduate and postgraduate students. What we’ve been less successful at is in taking that learning and that knowledge and translating it into something that you would call wisdom, which we would say wisdom is the judicious application, the thoughtful application of knowledge.

So we keep going back to this at UCL and asking, what should we be doing that’s different? How can we better challenge reductionist thinking and silo-based thinking within these great institutions, and do something that no other institutions on earth have the capacity to do. Private sector doesn’t have this resource, governments don’t have this resource, certainly not any longer, and universities are uniquely possessed of a capability which is under-deployed, which is to draw together people who can think about some of the big questions.

What we did at UCL was to work out with faculty what were the four big questions that we thought we could do some work on at UCL. The first was global health, and in global health we found that some of the most potent contributions have been not from the medical community but from areas such as architecture and town planning; from engineering around sanitation, desalination and decontamination of water supplies; around economics, which are to do with the delivery of health care in countries where political structures are fragile; and lawyers around international regulation, for example, around the tobacco convention. It’s bringing all of these together.

We did a wonderful study for the Lancet — it’s the first time they’ve ever commissioned a university to do a study — which was on the impacts of global climate change on global health. So you had two sets of data, different models for global climate change, different models for global health, and so they married them together and were able to explain what’s the impact of a two-degree temperature rise on a particular vector of disease, so fabulous new thinking. That’s what I mean, that’s a small example, but quite a telling example of what you can do by bringing together the disciplines.

If you can do that within a university, how much more powerful might it be if you did it much more strategically between some of the big universities? So we’re doing a bit more of that now in London, we’ve just started a new institute with the London School of Hygiene around pathogen research and infectious diseases. We’ve been working for some time with Imperial College on nanotechnology. We’ve signed a major agreement with Yale two years ago around biomedical collaboration and we feel that these are laying down some of the foundation stones for the future. Now I may be being overly optimistic about this but I feel that if we don’t make a really determined effort, universities will continue to be good at what they’re good at, but still falling short of what they might be able to do. It’s a huge challenge, I think.

Arabic Knowledge@Wharton: You’re saying, then, is that universities should pool knowledge to possibly work on common themes?

Grant: Part of my original thinking on this was a discussion with a man called Tachi Yamada, who Bill Gates appointed to be head of the Gates Foundation on global health, saying what he wanted was universities that could think in this way, and he looked around the world and he couldn’t find them. Then we thought, hang on, we can do that, you know it’s not rocket science. You should never underestimate the complexity of universities and the pride that academics take in their position and in their position within their own discipline; many academics would be very honest and say they had greater loyalties toward their discipline than they did to their department or than to their university, so we’ve done it through a system of incentives, open discussions, town meetings, some pump-priming money, and I would say we’re still very much in the early stages of what we think we can do.

Arabic Knowledge@Wharton: Why should universities seek more global collaboration?

Grant: It’s how you put the question. We all know for example, that there are huge problems in global health, but mortality and longevity vary. If you were a woman born today in Sweden or Japan, on current longevity figures you’d expect to live to 80, but by the time you got to 80, it’s probably going to be 100 to 120. But in part of sub-Saharan African it’s more like 45, so there are huge inequalities around the world. There are mechanics of global health that are necessary to understand and to change if we’re to start to address some of those problems, and I put this right alongside global economic crisis as being one of the major challenges that faces the world.

If you ask the question then, what can universities individually or more collectively do, then the answer is, one hell of a lot. It’s not too difficult to conceive of a better joined-up approach than what we’re achieving at the moment. Now if some academics were to say well, this is all wrong, we should be just doing this, this and this… and I agree entirely, and that’s fine. I don’t think you should try to undermine progress and innovation within disciplines, but I think it’s quite important to reflect from time to time on the broader concerns — we start using the language of social responsibility of universities, the social responsibility across teaching and research is obviously quite clear up to a point, but is there a broader social responsibility that we’re falling short of?

Arabic Knowledge@Wharton: Being in the Gulf, what do you think about universities from other countries opening up campuses in this region?

Grant: I think it’s very early days. I don’t think we’re ready to pass judgment yet on the success or otherwise of these ventures. First to declare an interest, we are just opening in Doha, we are the first British university to do so. But it’s absolutely true to our model, which is that internationally, we are only willing to open what are effectively research institutes with some graduate teaching, not the major undergraduate mass education model. And the reason for that is we feel first of all, that we get much more support from our faculty at home for doing specialist post-graduate institutes, so our new campus in Doha is based around archaeology, conservation and museums. For that, we have strong faculty support and there’s a big demand in the region. Now if that works well, we’re certainly willing to contemplate other areas of activity, but all of them research-led. I think this way we can better maintain quality overall and not put [our quality] at risk, which is rather more vulnerable in the case of undergraduate education.

We have another campus in south Australia where we’re doing energy and natural resources. And we’re also working to advise the government in Kazakhstan on its new campus in Astana. Our view is in this globalized world it can’t be the universities alone that sit at home, we have to I think engage with globalization; and it’s not sufficient to do what we’ve done for decades, which is to have the world come to us. But we’re very cautious and I think rightly so. Like most of the really research-intensive universities around the world, we are turning down huge numbers of proposals to establish ourselves elsewhere. We have to be able to do it at a pace that we can manage, because there’s a huge drawdown on senior management time to do any of these ventures. And we have to be satisfied that it fits with our mission and what we want to do.

Arabic Knowledge@Wharton: What do you think about university education among local institutions in the region?

Grant: It’s going to be a very interesting region because you’ve now got several types of university. There are the universities like the Higher College of Technology and in Sharjah where women and men are taught separately. I don’t think anybody anticipates that that will continue forever. I think that there will be a move towards general co-education, but it takes time for cultures to change to accept that.

Secondly, you have got universities like the American University in Sharjah that is already fully coeducational. There are two systems already within the native universities. Then you’ve got some long-established universities like the British University in Cairo and the American University in Beirut, (with) somewhat mixed reputations. The American University in Beirut has been through the most awful period through the civil war, Cairo has been through a period of neglect of higher education, so there are real opportunities now for them to rebuild on their old roots and to grow and to expand.

And then you’ve got the entry of places like New York University, which has founded a campus in Abu Dhabi, which I think the rest of the world is watching carefully to see what happens. Is it going to be a success to take a transplant from the center of New York and put it here in Abu Dhabi? I have enormous admiration for NYU President John Sexton, he’s an old friend, and I wish it well. And if it thrives, then others will follow. But I think it’s still too early to tell and there’s a circulatory process which is that it will only succeed once it succeeds, in other words, once it’s built up a cadre of strong students so that it has a reputation for academic strength, not just from Washington Square, but here as an institution. At the catchment area it’s potentially very significant. A catchment that ties a university here with New York or London, I think, is quite potent.

Arabic Knowledge@Wharton: Within the context of the Arab Spring, how might that impact education in the Middle East and North Africa?

Grant: I really don’t know. I think it’s so early. Are we really going to see anything come from the Arab Spring? In Egypt, I don’t know, I think Egypt will end up with some uneasy truce between the military and the Muslim Brotherhood. In Tunisia, I don’t know what’s going to happen there. We’re still awaiting anything in Libya… Syria remains in disarray. So the Arab Spring is not joined up with light at the end of the tunnel. If the effect is that it puts a warning shot across the bow of despotism then that’s a hugely beneficial outcome. But I don’t think any of us can yet be confident that that is the case.

My impression in Egypt is that education is being suppressed. There’s huge appetite for it. I went there with [U.K. Prime Minister] David Cameron’s entourage in February soon after [former Egyptian President Hosni] Mubarak stood down, amongst the then-leadership was [a strong desire] to invest in education. Most of them had been educated abroad, most of them actually in the U.K., and wanted to be able to pass that on to future generations. But there are so many other problems of civil society still to resolve in Egypt and fundamentally future leadership, redrafting the constitution and introducing free elections. So a long way to go one thinks before we’ll see the investment in education. Education is not cheap; it’s a very expensive thing for a government to invest in. But there is no future for a nation unless there is investment in it.

Arabic Knowledge@Wharton: As the head of a large academic institution, how would you describe to your approach to leadership, overseeing such vast research areas and interests?

Grant: Only one word, which is teamwork. I put a lot of time into developing a really top team and we’ve got it now. So I’ve got 10 faculties, each of them with a dean, and we’ve got five vice provosts or presidents, people who report directly to me also with responsibility across the whole institution — so one for research, one for education, one for enterprise etc., but they all work as a team. So that whole group meets once a week with me. And their function therefore is to support each other not to run competing areas of the enterprise. And I think one of the things that sometimes trips universities up is when there are too many enclaves wasting too much time fighting each other. Academics are really good at this. We’re a really skilled tribe; we’re really clever. And if you get into a fight you’re usually pretty good at winning it. So I would much rather they compete with the outside world than competing internally.

One piece of evidence of that was earlier this year when we set the budget. The discussion around my table took about 40 minutes, no more. Now normally these things are head-banging, but because people were willing to say, ‘Yeah we did well last year and we’ve accumulated a little bit of a surplus and we can see that you need to invest over here,’ and a very accommodating approach to budget-setting, that sets a mood across the whole of the institution, which encourages the sort of collaboration we were talking about before. So I’m very simple-minded about what’s needed to have good universities running well. It’s simply teamwork and joining up of ideas and objectives and mutual support.

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