As the autumn term closes, the tea leaves have settled. What patterns do they reveal about the government’s vision for higher education and how universities will fare under it?
The past few months have been hugely consequential for the sector. The Post-16 Education and Skills White Paper might have been the centrepiece, but announcements have come thick and fast: from the Curriculum and Assessment Review, the Industrial Strategy to the changes to REF. They have all played a part in shaping the direction of travel for HE under Labour.
Ahead of the 2024 election, University Alliance called for a new post-16 strategy in our Let’s Get Technical paper. Under the previous administration, strategy was scarce. Whilst we may not agree with every direction given, there is at least a guiding hand at work. The question is whether this is a coherent vision for evolution – or a muddled period of transition.
The 2025-26 academic year started with a bang. Financial and regulatory pressures have been building for decades, and the Kent and Greenwich collaboration (the institution of University Alliance Chair Professor Jane Harrington) is a high-profile signal of how universities are rethinking structures to ensure resilience. The indexed-linked uplift in tuition fees will ease some strain.
However, years of underfunding cast a long shadow, and policymakers must also recognise the mounting and particular pressures on post-92 universities in the form of the looming International Student Levy and the legally mandated Teachers’ Pension Scheme.
Regulation adds another layer of complexity. The Office for Students’ renewed approach to quality promises flexibility, but expectations are mounting. Providers must maintain world-class standards whilst offering more responsive, regional provision. Add anticipated TEF changes and the climate feels turbulent. A streamlined regulator focused on what matters to students would help institutions channel scarce resources into teaching excellence and civic missions. For now, government vision and regulatory reality remain out of sync.
Parity or precarity has been another theme. The return of maintenance grants was welcome – until the funding mechanism emerged: an international student levy. A £1,000 grant will barely touch the sides for those who need it most, and the flat £925 International Student Levy risks penalising institutions doing the heavy lifting on widening participation. Grants tied to IS-8 subjects underline a clear shift: financial support tethered to national economic priorities.
The Industrial Strategy has become higher education’s compass in the Government’s eyes. Its eight priority sectors now shape funding and regional planning. Pivoting curricula towards these sectors may squeeze creative disciplines and social sciences, undermining the broad skills base employers say they need.
The Curriculum and Assessment Review deserves credit for aiming to broaden learning and restore parity for vocational qualifications. But it was a missed opportunity. The fixation on high-stakes exams at 16 means we are tinkering at the edges. Exams at 16 risk becoming the new “11-plus divider,” baking in disadvantage before tertiary routes even open.
International comparisons underline the point: the UK is an outlier in maintaining such a decisive juncture, with the OECD urging smoother transitions and flexible pathways. This matters. NEET rates are highest among those with lower qualifications, and automation and AI will only raise skill thresholds. A secondary system that produces high numbers of non-progressors is a long-term national vulnerability.
Bold on curriculum, meek on assessment might be the phrase that sums up the review. The upcoming Milburn review may offer solutions for NEETs, but the timing is awkward. We missed a chance to be transformative lower down the pipeline, and the tertiary sector will pick up the pieces.
Mature learners remain under-served. The Post-16 White Paper says too little about reskilling and upskilling the existing workforce, even as forecasts point to large skills deficits. Defunding Level 7 apprenticeships undermines progression routes precisely when higher-level skills are needed. Whispers about Level 6 only compound the sense that skills policy is concentrated on NEETs, not across the piece.
The Lifelong Learning Entitlement, due to begin in September, promises flexibility through modular funding, credit transfer and break points. But debt-led models remain a hard sell. YouGov polling for University Alliance polling found only 24% of adults under 60 would borrow to finance mid-career learning. Without grants and employer co-investment, the LLE risks falling short.
Local Skills Improvement Plans (LSIPs) are expected to embed industrial priorities into regional provision. Skills England’s updated guidance rightly recognises universities’ central role, which is promising. But implementation will be uneven. Some areas have strong combined authorities; others are playing catch-up. Regionalisation remains a patchwork.
Looking ahead, financial resilience will dominate 2026. Expect more mergers and closures as providers navigate tight budgets. The impact of the international student levy on finances will be closely watched. Maintenance grants are back, but adequacy will remain a live debate. The V-level consultation next year will be critical. Will it deliver coherence across the system, or deepen fragmentation? LSIPs are due in March, and universities will be central to making them work – but expect growing pains as regional disparities persist.
The government’s vision for higher education is ambitious, but ambition without coherence risks producing a patchwork of disjointed initiatives. If we are serious about a thriving education system, we need proportionate regulation, adequate funding for institutions and disadvantaged students, and subject breadth alongside priority areas. We must embed employability skills into curricula, refocus on adult learning and rethink secondary education so more young people progress confidently into post-16 routes and adults embrace lifelong learning.
The tea leaves tell us this: industrial priorities will dominate, regulation will tighten, and regionalisation will remain uneven. The challenge for 2026 is to turn this patchwork into a pattern – one that supports learners not just to get in, but to get on, throughout life.
