English universities at a “tipping point,” facing a financial crisis

Universities in England are facing a “tipping point” this autumn, confronted with a financial crisis, report vice-chancellors who urge the new government to take action before it´s too late.

English universities face a financial crisis

As A-level results arrive in English households, young students contemplate their future, growing aware of the unfortunate reality that English universities are no longer what they used to be.

Being starved of funding by the previous Conservative government, universities across the UK have now readjusted to setting their worth at approximately €6,999 per year, with at least 67 institutions carrying out redundancy and restricting programmes. Two recent reports by the PwC and the Office for Students have forecast that 40 per cent of English universities will run budget deficits this year.

Vice-chancellor of the University of East Anglia, David Maguire revealed that unless long-term funding from the government is secured, most universities will have to deal with cutting staff or merging with other institutions; “an awful lot of institutions are placing extremely large bets on this recruitment round. Quite frankly I don´t think there are enough students to go around.” 

Another vice-chancellor, who preferred to remain anonymous said that the 2024 admission round was “doubly dangerous” due to declining numbers of students and increased costs; even in comparison with last year, universities are spending more than they are earning. “It´s like Ernest Hemingway said about the two ways of going bankrupt – gradually, then suddenly. We´ve had the “gradually” part.” 

The University and College Union announced that Sheffield Hallam University staff were now the latest to vote for strikes next month, protesting against “unprecedented” job cuts. 

David Maguire expressed the need for governmental action; “the government is misguided…they should recognise the severity of the situation.” “If a university goes down, the loss of jobs, the cost of dealing with students and the overall impact on the local economy will reflect very badly on the government, and I don´t think that´s in anyone´s best interests.” 

English institutions facing crisis; how the government can improve or destroy universities

As the UK´s Conservative Party stepped aside in people´s favour of a centre-left Labour Party, universities across the country are expecting the government to seek improved EU relations but so far have seen no signs of the UK joining the next European research framework programme or the Erasmus+ mobility scheme. Faced with the lack of funding, universities are having to cut back on subjects and academics.

David Maguire noted that UK universities are now having to “aggressively” recruit English national undergraduates in the clearing admissions process, following the international student recruitment decline. “I think some (governing) councils will be calling in the books, as it were, and assessing the financial viability of their organizations. So I´m very worried about the months of October, November and December.” 

This is also a concern for the Research & Development system as in the UK, research is more concentrated in universities than in European countries where there are separate research institutions; with the Conservative´s anti-migration stance, there has been a huge decline in foreign recruitment.

A 2024 Royal Society analysis disclosed that immigration costs for researchers and students were six to eight times higher in the UK than in countries like the US, Japan, and Germany and had more than doubled since 2019.

“The next government should aim to make the UK the best place in the world to do science,” said the head of the policy lab at the Wellcome Trust Martin Smith. “This means committing to long-term public funding for research institutions and reduce up-front costs for international visas.”

Vivienne Stern, chief executive of Universities UK highlighted that to the EU, the UK´s crisis is; “in European terms, this sounds horrifying.”

With the new government, institutions across the UK are still hoping for support as the Labour Party stated in their manifesto; “Conservative attacks on our globally respected institutions – universities, courts and the BBC – have undermined our soft power, traditionally a source of great strength, and diminished our influence.”