The various funding and regulatory systems of UK higher education are fraught with paradoxes and contradictions ¨C and a vast majority of vice-chancellors responding to PA¡¯s latest believe that fundamental reform is vital to universities¡¯ long-term survival amid the greatest combination of threats they have ever faced.

Universities¡¯ own institutional responses to falling real-terms revenues and rising costs differ little from previous years. They?mostly focus on seeking short-term gains from established patterns of higher education business. Examples include growing student enrolments and associated revenues from both domestic and, especially, overseas markets; cutting back on low-demand courses; attracting more research grants and contracts; and cutting professional staffing.

But while these measures have proved reasonably effective as coping mechanisms through previous periods of austerity, many vice-chancellors told us that they are no longer enough to bolster institutions¡¯ resilience.

For instance, frozen tuition fees in England and Wales have made increased recruitment of home students a loss-making enterprise ¨C and increasingly difficult amid flattening, even falling, levels of demand. Rationalising course portfolios reduces student choice and undermines access, especially for smaller institutions. Research remains structurally underfunded, meaning that expansion usually leads to greater financial deficits. And restructuring universities without addressing the underlying process and technology issues often reduces service quality, as well as damaging morale and inflaming industrial relations.

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Only buoyant demand and premium fees from overseas students offset this otherwise unsustainable outlook. But this reliance brings existential vulnerability for some providers and programmes in an increasingly problematic international market. As one eminent vice-chancellor lamented, ¡°We have been propping up a 20th century system that is no longer fit for the purposes of the early 21st century.¡±

Fortunately, many vice-chancellors have begun to realign their institutions in line with the changing purposes of higher education in the 2020s. One example is collaboration between universities and further education colleges to open flexible pathways for more people to access higher education ¨C such as through franchised courses, foundation years, work-based apprenticeships and credit transfer and articulation schemes.

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Another is civic university agreements and other frameworks for engaging with locality-based development initiatives, from nurturing new and small businesses to participation in community health projects.

A third example is investment in digital platforms and applications to offer greater choice and flexibility to a wider pool of learners, enhance institutional agility, improve the cost effectiveness of operations and transform services for students, academics and staff.

Finally, universities are establishing multi-provider partnerships to share high-cost facilities and build critical masses of expertise and capabilities in emerging technologies (such as artificial intelligence) or to address multidisciplinary challenges (such as climate change).

Taken together, these measures offer the possibility of a more relevant, open and engaged higher education system, answering criticisms that provision has become unduly rigid and overly distanced from the needs of today¡¯s learners, employers and communities. But we are still some way from these initiatives becoming the new norms.

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The challenge for universities seeking to foster greater openness, innovation and collaboration is that they cannot do it on their own. The reforms envisaged by progressive leaders all require a shift from a sector of autonomous providers to a series of ecosystems built on combinations of diverse players ¨C universities, colleges, local authorities, development agencies, health services ¨C each with their own constitutions, obligations and concerns.

While it is relatively easy to persuade potential partners to subscribe to this approach in principle, it has proved hard to translate into practical collaborations, which require subordinating narrow institutional interests to shared, often indirect societal benefits.

This has been made all the more difficult, in the views of many vice-chancellors, by the ways in which competition has been hard-wired into our educational, skills and innovation systems. Providers are incentivised by government policies to maximise their individual shares of available funding and markets, often at the direct expense of their peers. This is an explicit outcome of competitive funding programmes, whose ¡°winners¡± are thereby discouraged from forming multi-partner collaborations.

The disparate funding and regulatory regimes for higher education, further education and apprenticeships across the UK further undermine the potential for cross-sectoral collaboration.

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Given the state of the wider economy, vice-chancellors do not expect that the difficulties facing the university sector will be eased by increased public funding any time soon. But they nonetheless envisage considerable opportunities for more imaginative and flexible deployment of the huge existing budgets locked into different segments of the wider national tertiary education and knowledge exchange systems.

Seizing those opportunities would reduce wasteful competition and free up possibilities for genuine system reforms.?

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Ian Matthias is head of higher education and Mike Boxall is a higher education expert at PA Consulting, whose latest survey of higher education leaders can be viewed .