Higher education commentators have been warning for years of a looming crisis in university funding. Now, they are beginning to ask which institution will go bankrupt first. Few expect that the government would step in to bail out a university in serious financial difficulty. For one policy expert, it’s already “too late” to avert the oncoming disaster; “all everyone can do now is brace”.
Almost half of UK vice-chancellors expect their university to run at a loss this year. The value of tuition fees for domestic students has been falling in real terms, amid high inflation, since they were frozen in 2017 at £9,250 per year. For reasons that are not at all difficult to understand, almost no one – from politicians to students or their parents – wants to raise them. Universities have increasingly been making up for this shortfall by recruiting students from abroad, who pay dramatically higher fees. And now international student numbers, too, might be falling.
After years of headlines about lowering net migration figures by “clamping down” on foreign students – who were supposedly “squeezing out” their UK counterparts from university places – it is now being realised just how dependent domestic students are on this subsidy. At many of Britain’s leading universities, more than half of their income from fees comes from international students. According to modelling by the accountancy firm PwC, a 20-percentage-point drop in international student enrolment next year could send four-fifths of English and Northern Irish universities into deficit. Early admissions data suggests that the number of overseas enrolments has fallen by more than a third.
At the time of writing, 44 universities – over a quarter of the sector – have announced staff redundancy programmes. At Goldsmiths, University of London, the University and College Union (UCU) warns that a quarter of all academic roles could be cut under a proposed restructuring programme, with some departments losing half of their staff.
With wearying inevitability, cuts will be borne disproportionately by arts, humanities and social sciences departments. Some will doubtlessly cheer the trimming of supposedly “low-value” subject areas. They may be less enthusiastic about the knock-on effect their demise would have on more expensive to teach science and technology subjects, or the wider impact of rapid restructuring in a sector that supports more than three quarters of a million jobs and contributes £130bn to the economy.
For academics, morale is at an all-time low. The prospect of further job losses follows on from years of falling pay, unmanageable workloads and increasingly precarious working conditions, as well as a five-year-long industrial dispute over proposed pension cuts in the Universities Superannuation Scheme (USS). Many of those who took part in the UCU marking boycott over the summer of 2023 faced punitive wage deductions, with some universities deducting 100 per cent of pay.
For students, the outlook is little better. While their fees have been frozen, their cost of living certainly has not. Housing and transport costs are spiralling; research conducted by the National Union of Students suggests that one in ten students are accessing food banks. Academic job cuts will mean less choice and more uncertainty, with courses set to be cancelled or restructured with little notice. And regardless of the losses universities incur for each UK student they teach, students still leave with astronomical debts. The terms of their loan repayments have been, and may continue to be, subject to huge retrospective changes.
But perhaps the worst problem of all for universities is just how bad we are at talking about them. For decades, the prevailing tenor of political and media debate has been to hector universities: “Behave like a market! No, not like that!” Time and again, governments have been astonished by the unintended – though widely predicted – consequences of their legislation. Almost no one with a substantial public platform seems to have an adequate grasp of the structure of higher education or the way it is financed.
Predictably in these circumstances, the wider public fails to understand how universities work, or how they are funded. Instead, they are given an incessant stream of manufactured outrage about content warnings, student radicals, left-wing lecturers and moral panics about threatened statues or portraits of the monarch in common rooms. On the one hand, the government’s “free-speech tsar” proposes that students should “consent to be harmed” by the content of their courses. On the other, journalists single out the recipients of grants for supposedly unworthy research projects. “Big Woke” is apparently diverting huge sums of taxpayer money “towards hard left ideology”, according to the journalist Charlotte Gill, who has been tweeting screenshots of publicly funded projects on, say, “The politics of the English grain trade, 1314-1815”. (Funded value: £879,525.)
“Do we think it’s a crisis? No, we do not,” said the Science Secretary and former universities minister Michelle Donelan in March, when asked about concerns over university funding. (Ministerial churn is a compounding problem for university planning – there have been ten ministers of state responsible for higher education in ten years.) Donelan’s predecessor as universities minister, Chris Skidmore, characterises the situation differently: “What we’re seeing now is obviously the dying days of a party that is likely to lose power, flailing around, trying to scrape the bottom of the barrel with some messaging that is divisive… Sometimes they say, ‘Yes, we’ve got the best universities in the world.’ Well, you’re about to destabilise the best universities in the world with your policies.”
This has all become so exhaustingly familiar. For all that, we are no less unprepared for what is coming, nor closer to an alternative vision for how to keep those world-leading universities in business.
[See also: Not all Yimbys are your friends]
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