UK's universities struggle with funding deficit

Amidst mounting financial pressures on universities, the head of England's higher education watchdog has warned that the sector's "golden age" may be over.

The head of England's university oversight body has warned that the "golden age of higher education" may be coming to an end, emphasizing that all potential solutions should be considered in light of the sector's severe funding crisis, Caliber.Az reports citing the foreign media.

Sir David Behan, interim chair of the Office for Students (OFS), suggested that increasing tuition fees and easing visa restrictions for international students could provide much-needed relief for struggling institutions.

In an interview with the Sunday Times, Behan highlighted the multiple challenges facing the sector, including the global pandemic and the repercussions of Brexit. "The resilience of the sector has been tested by various factors," he stated, reflecting on the profound impacts these events have had on higher education.

“We’re facing a range of challenges: industrial action, the cost of living crisis, rising pension costs, a decline in international student numbers, and stagnant domestic undergraduate fees that have been frozen since 2012. As a result, many institutions are grappling with significant fiscal deficits,” Behan said.

He urged universities to consider mergers or partnerships to address financial instability and avoid potential bankruptcies. “It’s crucial for universities to reassess their medium-term financial strategies. They can’t continue operating as they have been,” Behan added.

When asked about potential government actions, such as increasing tuition fees or lifting visa restrictions for postgraduate students, Behan replied, “To mitigate risks to the sector, we must explore all possible options. As we approach the budget and spending review in October, it is essential to consider all strategies to ensure the financial sustainability of higher education institutions.”

University leaders are advocating for an increase in the annual tuition fee for domestic students, suggesting adjustments in line with inflation to support financially struggling institutions. The previous government raised the cap on university tuition fees in England to £9,000 per year in 2012, but this has remained fixed at £9,250 since 2017.

Universities argue that their costs have surged due to rising energy bills, inflation, and compensation claims for students affected by strikes over pay and pensions. To offset financial pressures, institutions have heavily recruited international students from countries like China, India, and Nigeria, who contribute up to £38,000 annually in tuition fees. However, recent visa restrictions on overseas students have impacted this revenue stream.

In response to these financial strains, Education Secretary Bridget Phillipson addressed the issue following A-level results day, stating that any substantial increase in tuition fees over the next five years would be “unpalatable.” She acknowledged the challenges faced by institutions but stressed that raising fees to such an extent would be highly undesirable.

“Not least because I know that many students across the country are already grappling with significant challenges related to the cost of living and housing expenses. Many students I speak with are juggling multiple jobs and extra hours just to afford their studies,” she added. “The government is committed to reforming the system as a whole.”