UK universities will be forced to step up course closures and job cuts unless the government addresses a looming structural funding crisis in the sector, according to higher education leaders.
The warning follows a spate of lay-offs at more than 50 universities this year, citing financial pressures, including voluntary redundancy announcements by Portsmouth and Sheffield Hallam in recent weeks.
Rachel Hewitt, the head of MillionPlus, which represents the former polytechnic “post-1992” universities said that sector faced inevitable further erosion, with cuts landing hardest on institutions more likely to serve disadvantaged students.
“Already the sector has seen redundancies and course closures and without action this trend will worsen. As financial pressure continues to bite, there are further risks to student choice, services and opportunity,” she added.
UK universities, which expanded rapidly over the past decade, are struggling with a funding crunch caused by a decade-long freeze in tuition fees for domestic students, which will remain in place for at least another two years, rising operating costs and, most recently, a drop-off in higher-paying international students.
The plea for more government assistance puts university bosses at odds with the ruling Conservative party, which has argued that the sector has become bloated, providing too many courses that do not offer a return on students’ investment.
One senior Tory minister blamed the sector for pursuing several years of “unsustainable expansion” by exploiting demand from overseas students, in particular those from China. They argued the ongoing retrenchment was a necessary market adjustment to economic conditions.
The government said it was providing £6bn a year in direct financial support to the sector and another £10bn a year in tuition fee loans. “It’s vital we have a sustainable student finance system that is fair to students and taxpayers,” a spokesperson added.
However, Vivienne Stern, the chief executive of the Universities UK lobby group, said that the sector faced fundamental challenges even after the latest round of aggressive cost-cutting.
“While this provides some mitigation, the scale of the challenge being faced means that even these best efforts will not be sufficient to ensure the long-term financial sustainability of the sector and the 385,000 jobs that directly sit within it,” she added.
The freezing of tuition fees means universities are losing £2,500 a year on average per student and that will rise to £5,000 by the end of the decade, according to analysis by the Russell Group of research universities.
Stern added that unless government grants increased and fees were allowed to rise in line with inflation, students would suffer. “This will impact the education that students will receive. Urgent action by government is needed,” she said.
The post-‘92 universities are being hit hardest by the latest round of cost-cutting, according to a list compiled by Liesbeth Corens, the social media manager for the University and College Union at Queen Mary University, London.
Hewitt said those institutions had lost potential domestic students to higher-tariff universities as a result of grade inflation during the Covid-19 pandemic. At the same time, they had seen steep falls in applications from countries such as India and Nigeria, which they had previously targeted as part of their expansion of international student recruitment.
Universities said the government’s tighter immigration policy was partly to blame after ministers removed the right for most graduate students to bring family members.
This week James Cleverly, the home secretary, announced that the number of dependants accompanying students to the UK had fallen by almost 80 per cent, with more than 26,000 fewer overseas student visa applications made from January to March 2024 compared to the same period in 2023.
Corens said the repeated cost-cutting was sapping morale among staff and students. “These cuts are short-termist, short-sighted interventions that will have long-lasting effects and do nothing to tackle the actual structural financial challenges facing the sector,” she added.
Some universities have responded to mounting cost pressures by cutting courses or in some cases closing entire departments. Others have begun voluntary redundancy programmes. Analysis by the Times Higher Education supplement put university severance payouts at over £100mn in the 2022-23 academic year.
Glen O’Hara, a professor of modern history at Oxford Brookes University, which announced it was expanding its voluntary redundancy drive in March, said the constant attrition across the “squeezed middle” of the sector has demoralised large swaths of the profession.
“The way the sector is behaving is totally at odds with the ethos of the lecturers, many of whom joined a state-managed profession to educate young people and now find themselves expendable employees in a now-corporate sector,” he added.
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