Universities’ many challenges

All over the country there are parents busy making practical, financial and emotional preparations as their 18-year-olds set off for university. If they have been cajoled into loading up the car to drive offspring and belongings to a university town, long-suffering parents may catch a glimpse of the student accommodation on offer and mutter “it’s not like it was in my day”. And they would be right.

Universities are valuable repeat clients, with big budgets, ambitious projects and demanding end users

Once there may have been a certain pride in enduring grim student digs, but these days when students are paying good money for their degrees, there is an expectation of decent facilities such as ensuite bathrooms and well thought-out social spaces. Universities, in competition with each other for undergraduate numbers, cottoned on to this early and have been busy replacing and improving accommodation, which has been good news for the construction firms able to win the work.

Of course, student accommodation is just one part of a very substantial university construction market. Overall the capital expenditure at UK universities runs at about £3.5bn a year, which according to the Association of University Directors of Estates (AUDE) is roughly in line with the previous year. Simon Rawlinson of Arcadis (read Simon’s piece online on Monday) points out that the volume of construction work from this sector has doubled in real terms since 2012, and that the wider construction market, if you take into account associated housing, was worth £6bn in 2018. And looking ahead, AUDE points out that a quarter of the university estate was built in the 1960s and 1970s and is in need of renewal.

• Read Building’s overview of the universities and higher education sector online from Monday

Universities are valuable repeat clients, with big budgets, ambitious projects and demanding end users – just look at our review of UCL’s £67m Student Centre. What marks out this building, designed by Nicholas Hare Architects and built by Mace, is the fact it has no teaching space nor indeed any retail space to recoup its costs. The entire space is for studying, but not in the sense of an intimidating academic library setting you may have encountered – this is “mixed-mode study” merging circulation, social and study spaces so that students can gather and work together more informally. And in terms of technology in the building, there are sensors and an app to help students find suitable space and help the university understand how the building is working. It really was not like this in your day.

So universities represent a healthy pipeline of interesting work, which is massively important for construction, but they also represent something else: intelligent clients who know the value of the work they are procuring, not just the cost. This is what is refreshing about talking to someone like Mary Pierre-Harvey, the new director of estates at Oxford Brookes University. No, this is not one of the biggest universities in the country, but even a mid-league player in this sector is big when it comes to its construction ambitions. Pierre-Harvey has 500 people in her team and is charged with a 10-year capital programme worth £220m and several substantial projects on the horizon.

What’s impressive about Pierre-Harvey, aside from her many professional and personal accomplishments to date, is her commitment in her new role to ensuring she procures quality buildings. The whole competence debate that has flowed from the Hackitt review is uppermost in her mind and she’s busy recruiting that much-overlooked role – a clerk of works. There’s also a recognition that her role is to drive the digital and offsite agenda and to generally try to be an innovative client. Now is that not the type of client the construction sector is crying out for? 

But while this week’s universities special issue highlights many positives about the sector, it would be a mistake to think that the boom times will continue forever given there is much to indicate the university sector may have reached a peak. For one thing, the country is experiencing a demographic decline in 18-year-olds entering universities and although that dip reverses by 2021, we are not expected to see a peak in numbers for a decade. This matters because each of those students represents over £9,000 in fees, so the loss in income will be a challenge to universities wanting to expand with new or repurposed buildings.

More worrying in the longer term though is the continuing uncertainty about government attitudes to university funding and student fees. It was easy to miss the Augar Review published as Theresa May’s government was crumbling around her, but it recommended fees be cut – a move many believe would fundamentally undermine universities’ business model.

Of course, who can say if these recommendations will be adopted by Boris Johnson’s government? Then again, we face the prospect of an imminent general election, raising the possibility of Jeremy Corbyn, a long-time opponent of tuition fees, being installed at Number 10.

Regardless of the political outlook of current or future administrations, the issue of Brexit is huge for universities because of the uncertainty it creates over student numbers and sources of international undergraduates as well as European sources of funding.

You could say that given these concerns university work has held up remarkably well over the past three years. But remember, many of the large-scale capital programmes are reaching completion, so what construction needs is another round of big investment decisions – and it is unlikely that will happen until there is some sort of clarity on Brexit.

Chloë McCulloch, editor, Building