The period since the election in May 2010 has seen a number of very far-reaching reforms enacted in the higher education system in the UK, and especially England. These have been driven in large measure by the economic situation, but also by the aim to introduce a more market-based approach into the sector. At the same time, the higher education system faces a number of long-term challenges, particularly in terms of how it can best contribute to much-needed regional and national economic growth. This article first summarises the reforms which have been put in place and some of the factors driving them; next goes on to set out the long-term challenges which the sector will need to address; and finally assesses whether the policy platform established through the government's reforms is likely to help or hinder the achievement of the sector's (and the country's) strategic aims. (Contains 2 charts and 1 note.)