GAMBICA | Lab Brief - August 2024

Lab Brief - August 2024

THE OFFICE for Students, which regulates higher education providers in England, has confirmed fears that UK higher education is in a financial crisis.

Around 40% of UK higher education establishments expect to be in deficit in 2023-24 and over 60 have already announced severance or redundancy programmes. The universities themselves predict a gradual recovery in surplus and operating cash flow levels from 2024-25, but this scenario is based on assumptions of increases in tuition fee income from both home and international students which are ‘far too optimistic’ says the Office for Students.

The sector believes it will achieve an increase in EU entrants of 18 per cent and non-EU entrants of 36.2 per cent between 2022-23 and 2026-27. The rest of the increase is dependent on rises in UK tuition fee income, where an increase in entrants of 23.9 per cent is forecast during the same period. These increases are not supported by the latest trends in student applications from UCAS which show a steady decline in the number of 18 year olds entering higher education.

Because of substantial inflation in the last few years, universities now make a £2,500 (real terms) loss on every home student according to the Russell Group.

Attracting students in a competitive environment required universities to borrow heavily to invest in new facilities.

Home Office data shows a trend of declining applications from prospective students for study sponsored visas. Recent information from the sector also suggests that mid-year recruitment in 2023-24 has been significantly lower than both historic and forecast levels, with suggestions of an average decline in entrants of over 40 per cent compared with the previous year.

Many higher education providers have taken, or are taking, action to manage tightening finances, including making cost savings, rationalising courses, modules and other activities, and making other efficiencies.

Although, research-intensive Russell Group universities are significantly better off than newer universities that focus on teaching, a change in funding strategies for universities is urgently needed if scientific research in the UK is to be maintained at current levels. All those interested need to come together to put pressure on the Government to tackle this crucial issue or all the attention will be on other issues currently more prominent in the media.

Toodle pip

Jacqueline

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