While some are adopting a ¡°wait and see¡± approach towards the new, more competitive student recruitment system, others are looking to borrow money to improve the student experience and finance a growth in numbers.

Forty-seven per cent say now is a good time to take risk onto their balance sheets.

The Higher Education Finance Directors Survey reports that many of those surveyed said their universities needed to ¡°invest considerably in order to maintain their competitive position¡±.

Another reason for this appetite for risk is the declining cost of credit, the report says.

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One third of the 35 respondents said that their university¡¯s level of financial risk had ¡°increased somewhat¡± in the last year while 6 per cent responded that it had ¡°increased significantly¡±, although half said that risk levels were the same.

Risk factors include an increase in a university¡¯s ratio of debt to capital or ¡°uncertainty¡± about the value of its assets.

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Asked what areas of expenditure would increase or decrease, the majority of finance directors expected spending on hiring to shrink.

A majority also expected the amount of bank borrowing and bond issuance to grow.

The impact of the coalition¡¯s tougher immigration rules is also being felt in the recruitment of international students, the survey suggests. Close to half of institutions said that changes in government policy had had a ¡°somewhat¡± negative effect on their numbers from overseas in 2012-13.

Overall, more than nine in ten finance directors said that their institution faces an above average amount of uncertainty.

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Julie Mercer, head of education consulting at Deloitte, said: ¡°While uncertainty still remains, there are now signs of a shift. Expansion, and how to fund it, is now a big priority for higher education.¡±

She added: ¡°Capital expenditure is needed to underpin the expansion of student numbers, support research, meet the demands of the 21^st century learning environment and compete in an increasingly global higher education sector.¡±

david.matthews@tsleducation.com