Financial Crisis Deepens for Universities in England
Universities in financial distress in England will force the next government to make some tough decisions to address this situation. The Institute for Fiscal Studies (IFS) has indicated that the new government will have to choose between raising tuition fees, providing direct grants, or limiting student numbers.
This year, over 50 universities in England have announced staff layoffs, including teaching staff, and some courses have been completely closed. The IFS suggests addressing financial issues by raising undergraduate tuition fees starting in 2025 and allowing them to increase with inflation. Additionally, the government could limit tuition fee increases by increasing the teaching grant subsidy paid directly to universities. The IFS also highlighted limiting the number of students going to university as another potential solution.
Vivienne Stern, Chief Executive of Universities UK (UUK), the collective voice of 142 universities, which works with the government and higher education sector to support UK higher education, emphasized that the erosion of student financing cannot continue without harming universities’ roles as educators and employers. She also stated that it is not possible to shield tuition fees from inflation.
Josh Hillman, spokesperson for the Nuffield Foundation, one of the leading think tanks in England, highlighted that universities relying on tuition fees from UK students are among the most vulnerable institutions in the current economic conditions. Hillman pointed out that undergraduate tuition fees have been fixed at £9,250 since 2016, but new fees calculated based on inflation would be £12,000. “The new government will face an unpleasant legacy that the previous ones did not address. Higher education funding needs a drastic overhaul,” he said.