Universities may face budget cuts

By Emma Padner

Due to increased costs and freezing undergraduate fees at English universities, research may be first to lose funding.

University research and innovation may be damaged by budget cuts stemming from rising costs and frozen undergraduate fee income at rUK universities. 

The warning comes from Jenny Higham, vice-chancellor for St. George’s, University of London, who is conducting a review of the financial sector for Universities UK. With budget cuts, universities will likely only have enough to cover requirements. 

“In the end, the obvious answer to this is we are going to do less research and innovation,” Higham said on 14 March at a Westminster Higher Education Forum.

Universities have increased support for students due to the cost-of-living crisis while simultaneously experiencing a rise in costs themselves. As of 11 February, one in four students accepted more debt due to the cost-of-living crisis. Two thirds of these students did so since their loans no longer supported the cost of living, according to Times Higher Education. 

The review, which began in December 2022, is 25% complete, as the group, which includes government, consumer groups, employers, staff and the public, attempts to find sustainable long-term funding solutions. 

“As a budget holder, I am nowhere near able to invest in the things that would be nice to do,” Higham said. “I am, at the moment, operating where I stay out of prison, at the element of regulation only. Because the margins we operate on are getting smaller and smaller and trickling into deficit. That is the reality of what it feels like.”

The group convened following Steve West, the president of Universities UK and vice-chancellor of University of the West of England, calling for a “national conversation” for high-education funding solutions, and for government intervention to restore maintenance grants in September 2022. 

“We need a long-term sustainable funding approach that creates long-term sustainability, is affordable and sustains across government departments and political parties,” West said. “Education is too important to plan on the basis of parliamentary terms or to be determined by short-term political whims.”

Providers in deficit fell in 2020-21 compared to 2019-20 from one third to nearly one quarter, Ashley McDougall, the director for local service delivery and value for money at the National Audit Office said at the 14 March Westminster Forum.

The cost of research saw the most significant loss, and the seeming balance in finances was mainly due to universities cutting down on costs and seeing an increase in donations and endowments, McDougall said. 

Universities also have an added cost for health and safety legislation and other requirements from the Office for Students. 

“We cross-subsidise, and fundamentally, in the broadest terms, we can no longer afford that cross-subsidy,” Higham said. 
It has been suggested by some vice-chancellors across the UK that universities will seek to fill the gap in funding by accepting more international students who pay higher fees. An investigation by The Glasgow Guardian found that the number of offers made to international students by the University of Glasgow has more than doubled over the last five years.


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