The government faces trying to find funding for 300,000 extra undergraduate places in England by 2030 if it is to meet likely future demand for ÖйúAƬ, a new report warns.

A demographic bulge in the 18-year-old population in the 2020s and further increases in the proportion of young people going to university will drive the upturn, according to a detailed study from the ÖйúAƬ Policy Institute.

The report warns that the figures are likely to provide a huge funding headache for the government ¨C which is already reviewing the current system of fees and loans ¨C and could force it to reintroduce the cap on undergraduate numbers that was lifted in 2015.

Hepi¡¯s study says that the current demographic decline in England¡¯s youth population will soon tail off before numbers climb sharply, the result of the baby boom in the 2000s that is currently putting a squeeze on school places.

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This on its own would mean that 50,000 more university places would be needed by 2030, but an additional driver will be a continuation of the trend seen in the past 15 years for wider participation.

¡°If participation were to increase at the average rate of the previous 15 years, then there would be demand for nearly 350,000 additional places by 2030,¡± the report says, adding that this scenario was ¡°quite plausible¡± given that England was still behind some advanced nations on participation.

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The only significant countervailing factor, the report adds, could be Brexit, which, by stemming demand from the European Union, may reduce the extra places needed by about 50,000 to 60,000.

It says that the resulting 300,000 figure for extra demand was ¡°perhaps the most likely outcome¡± but the study warns that it could be even higher if the relatively low rate of participation by boys picks up or access for disadvantaged students improves. In this case, the number of extra places needed could top half a million.

Bahram Bekhradnia, Hepi president and co-author of the report, said that the report ¡°complicates things¡± for the government¡¯s review of post-18 education, launched by prime minister Theresa May last month.

Mr Bekhradnia said that a major driver of the review was easing the fee loan burden on students, something that would likely cost the Treasury more. ¡°On top of that will come this huge increase in the demand for the number of loans,¡± Mr Bekhradnia said, adding that it created a ¡°circle that won¡¯t be squared¡± for public funding. Australia had faced similar dilemmas after lifting student number controls, he added, forcing it to backtrack.

¡°The trouble is these reviews are launched by governments hoping to find a magic bullet and there is no magic bullet here except either additional government expenditure or a limit on the number of places they are willing to fund,¡± he said.

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If there were a restriction on places, it could lead to universities raising the bar in terms of grades needed, something that could harm access for students from disadvantaged backgrounds, Mr Bekhradnia added.

Diana Beech, Hepi¡¯s director of policy and advocacy, and the report¡¯s other co-author, said that the predicted surge in demand was also significant for Labour, given that it wanted to axe tuition fees.

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But she hoped that a return to a numbers cap by any government would be the ¡°very worst-case scenario¡± and that ministers would realise that increased participation helped the government through the creation of more higher-earning graduates, who then paid more in tax, and were less likely to claim benefits.

Dr Beech said that there would be ¡°some tightening of the system¡± but demand could be addressed through creating additional routes into ÖйúAƬ, including more higher-level technical courses, new providers and different models of learning.

However, one consequence might be that fewer students went away from home to study, she added, warning that there was a risk that this model could become the preserve of better-off students.

¡°I think the going-away-from-home model might be where we see the difference in the sector. That might be reserved for the more advantaged families, which puts the onus on universities to make sure there is equal experience for those that live on campus and those that stay at home,¡± she said.

Dr Beech added that universities also needed to start planning now for the extra demand, including thinking about the future academic workforce by giving today¡¯s early career academics more security.

¡°Universities should be looking more to the long term and seeing if they can provide contracts more on a five-year basis. You need to make that pool [of academics] bigger in the middle to ensure you¡¯re going to have the senior lecturers of tomorrow for this 2030 cohort,¡± she said.

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simon.baker@timeshighereducation.com