Even with a late surge, final recruitment from England forecast down over 8,000, 2%

Even with a late surge, final recruitment from England forecast down over 8,000, 2%

Students from England dominate recruitment in English providers and are important in Wales too. Mark Corver uses our latest forecasts to assess how bad recruitment will be when the 2018 cycle finally ends.

UCAS is still processing students fro the 2018 cycle and will continue to do so for some time, releasing the final End-of-Cycle (‘EoC’) totals on the 29 November (UCAS’ publication timetable). We’ve been forecasting the likely final recruitment figures for students from England. This segment dominates overall recruitment and the balance of activity between now and the end of the cycle can make a material difference to the important final figures.

By this point forecasting the eventual numbers recruited from main scheme applicants (‘standard’ applicants who applied by the June deadline) is fairly secure. More uncertain are the final numbers placed from late ‘Direct to Clearing’ applicants. And most uncertain of all are the (increasing) numbers who get into a university without going through UCAS. These turn up in the data when they get reported by (impressively honest) universities to UCAS through what is known as a ‘Record of Prior Acceptance’ (RPAs). We’ve produced two forecasts for English recruitment: one on the relatively certain final numbers from main scheme applicants, and one that estimates the less certain ‘all-in’ figure that will drive university finances.

The final number of placed students from English main scheme applicants is going to be close to 348,500, probably within 500 or so if usual patterns of variability continue this year. That will be a historically large fall, second only to 2012 in recent times, and down around 11,000 (3%) from 2017’s final total of 359,540. This isn’t as bad as the fall in main scheme applicants (3.7%), as the proportion of applicants placed (the ‘placed rate’) has crept up slightly. But it is close enough to signal that the sector’s effective strategy of absorbing falls in English applicants by pushing up the placed rate is running out of steam.

Direct to Clearing activity from English students in 2018 has continued a recent strong run. We forecast that the current total of just over 9,000 placed through this route will grow to somewhere between 15,000 and 16,000 by the time the cycle ends. That would be an increase of around 1,300, almost 10% on last year. A new record for entry using this late entry route is very likely. Strikingly healthy compared to the main scheme route, but too small in absolute numbers to transform the overall outcome.

English students being recorded through the RPA route have been on the rise in recent years, hitting a record of 17,435 last year. Like Direct to Clearing, we see this trend as another indicator of the intensity of the recruitment market in England and expect it to continue this year. Our estimate is around 18,000 to 19,000, up just over a thousand or so. But the nature of RPAs make this especially uncertain and being a couple of thousand off wouldn’t be unexpected giving historic variability.

Looking at the total ‘all-in’ figure, the fall in main scheme students of around 11,000 looks set to be partially offset by the increase in the late entry routes of around 2,000. This would reduce the overall fall in recruitment of English students to around 8,500. The RPA-contributed uncertainty to this is fairly large, it could be couple of thousand different either way. Still, the best estimate at this time is that entry from England will be around 383,000, around 2% down on last year. Even with the (uncertain) mitigation of those main scheme losses by the late entry routes the fall will be easily the worse since 2012 and, unlike then, compounds a fall a previous year and with no prospect of material improvement for some time.

Only the very optimistic would have expected the sector to pull back all of the fall in English applicants this year, so these numbers won’t be a shock to most in the sector. Two things have become clearer in 2018 though. The shock absorber of higher placed rates looks as if it isn’t going to offer much protection against future falls. And the growth of late and very-late entry routes, itself probably indicative of intense market and the strong position potential students are in, is worthy of strategy attention, but is not coming from a large enough base to offset losses in main scheme students.

University finance directors won’t need reminding of the impact of the numbers in these forecasts.The fall in English students forecast for 2018 equates to a loss of around £250 million of fee revenue (across the duration of their UG study, assuming different course lengths and non-completion average out at 3 years), and will eventually have a depressing effect on PG tuition fees too. For the English students who have been recruited, the value of their fees in being eroded in real terms compared to the previous cohort. This probably amounts to an effective loss of around £200 million or so. So with many operating costs fixed in the short term, and independent of the number of students, universities will have roughly £500 million less real resource to teach this cohort than those who entered last year.

The story for the next couple of years is likely to be similar. We see the strategic challenge for universities is not to cut and trim ready for permanently lower levels of students, but rather to find a path that keeps the right type of capacity intact during this period so it is ready to accommodate the data-signalled demand from a new generation post 2020. Exactly what path, what capacity and what demand will vary from university to university: the answers are in the data.