Universities grip financial crisis – but at what cost to the nation? asks Universities UK
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As university leaders prepare to publish the outcomes of the first
phase of UUK's Efficiency and Transformation Taskforce, a new
survey has revealed the full of extent of cost cutting measures
universities are taking following years of tuition fees being
frozen and government action to reduce international student
numbers. The new data shows a university sector gripping the
financial reality it faces – but underlines the damage being done
to student choice, research and...Request free trial
As university leaders prepare to publish the outcomes of the first phase of UUK's Efficiency and Transformation Taskforce, a new survey has revealed the full of extent of cost cutting measures universities are taking following years of tuition fees being frozen and government action to reduce international student numbers. The new data shows a university sector gripping the financial reality it faces – but underlines the damage being done to student choice, research and the fabric of the university system, with operational cutbacks being the most common focus. The survey of 60 institutions, conducted by Universities UK, asked about cost cutting initiatives universities have undertaken over the past three years and what they may need to do in the next three years. It builds on a similar survey conducted by UUK in Spring 2024, and a comparison of the two shows how financial pressures are increasing.
In operations, 60% of institutions have scaled back on repairs and maintenance to existing facilities (up from 49% last year). 89% said they may need to do so over the next three years. Just over half (51%) of respondents have also cut costs on catering (up from 30%), and 46% on IT (up from 26%). The survey also found a quarter of universities have had to make compulsory redundancies, up from 11% this time last year. Despite having to make such tough decisions, universities have – to date – been able to protect the overall student experience. The most recent Student Satisfaction Survey showed improvements in all measures, including over 85 per cent of students responding positively on the three questions covering levels of academic support. This suggests that it is not the student experience, but student choice, being impacted – and this kind of loss of provision could have implications for priorities identified in the industrial strategy, as well as wider economic growth. Meanwhile, universities are also fighting to support the most vulnerable students. The results from the survey revealed the proportion of institutions cutting back on student bursaries in the past three years is one of the only areas to have decreased since last year (15%, down from 23%). Both student hardship funding and student bursaries were areas that universities were least likely to consider cutting in the next three years, just under half (49%) said they may still need to cut hardship funding and 59% said they may need to cut bursaries, further highlighting the risks of a continued decline in funding. Vivienne Stern MBE, Chief Executive of Universities UK, said: “The reality for most universities is that they have had to make serious cuts. Falling per-student funding, visa changes which have decreased international enrolments, and a longstanding failure of research grants to cover costs are creating huge pressures in all four nations of the UK. “University leaders are gripping the problem. UUK is working to help them through our Efficiency and Transformation Taskforce, which will publish its first outputs in the next few weeks. But we need governments in all four nations of the UK to do their bit. That means increasing per student funding; stabilising international student visa policy; and working with us to sort out the research funding system. There is also a long list of things which government does which imposes cost or barriers to collaboration which we want to work through, item by item, to get the barnacles off the boat. “Our universities are something the UK can be genuinely proud of. They contribute over a quarter of a trillion pounds to the economy each year and are essential to the Government's growth ambitions and the UK's future economic success. We need them to be firing on all cylinders.” The UUK survey findings revealed a worsening trend particularly around R&D activities, which is particularly notable given that a recent UUK report estimated that university research contributes £63 billion to the UK economy. While 19% have already reduced spending on academic R&D (up from 14% last year),79% said they would or may consider cutbacks to this area in the next three years, up from 34%. Institutions have also cut back on funding for early career researchers (18%), staff time allocated to research (18%), and support for research grant allocations (26%). Reducing staff time allocated to research was the R&D activity institutions were most likely to consider cutting in the future (79%).
Universities will continue to focus on what can be done within the sector to reduce costs. Universities UK will shortly be publishing initial findings from the work of its Transformation and Efficiency Taskforce, which will set out options for more collaborative working within the sector and how this can be paired with more sustainable financial support and policies from government to make a step change to sector ways of working. ENDS Notes to editors
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