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Icebergs, straight ahead

<ÁñÁ«ÊÓƵ class="standfirst">After years of warnings, a dip in international enrolments risks tipping universities into crisis. It is deeply strange that government seems not to care
January 18, 2024
People looking at an iceberg in the distance to illustrate Icebergs, straight ahead
Source: Getty Images

The fickle nature of media and politics was exposed by the belated explosion of the Post Office scandal, when a television dramatisation proved to be the end of a very slow-burning fuse.

The outrage comes a full 25 years after faulty accounting software was implemented by the Post Office, resulting in hundreds of sub-postmasters being prosecuted for thefts they did not commit.

The error itself is hard to fathom, but so too is how long it has taken for people to notice or care.

The campaign for justice began 20 years ago, yet it took a TV drama to sting politicians into serious action ¨C and, while the news media did not ignore the scandal, nor did it get the focus it warranted.

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There is, of course, no equivalence between this appalling miscarriage of justice and the funding crisis currently gripping UK higher education, but there is, I think, some crossover in the way that stories of great public interest can sometimes be ignored or underplayed, and so fester.

It is only in the last few weeks that the scale of the financial challenge facing UK universities, and its structural nature, has started to be reported on seriously by the mainstream media, and there is, as yet, no sign that politicians are interested in doing anything about it.

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At Times Higher Education, we have been reporting on concerns about the decaying funding system for years, but those warnings are rapidly coalescing into something more concrete.

With most university accounts for the last academic year now published, we are starting to see the impact of a combination of frozen domestic tuition fees, high inflation, the requirement to service debts, often taken on to invest during more optimistic times, and other financial hits.

One alarming aspect of the picture emerging is that some of the universities taking dramatic action to cut costs in response to financial challenges are among those that would commonly be held up as being at the savvy end of the spectrum ¨C such as Sheffield Hallam University and Coventry University.

This week, we take the temperature of the wider sector with a survey of UK vice-chancellors, in which we asked about the financial outlook at their own institutions, and their confidence or otherwise about the financial sustainability of their peers over the course of the coming year.

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The headline results are stark: of the?51 university leaders to respond, almost half expect their universities to face financial deficits in 2024, while the vast majority believe that some universities will risk breaching banking covenants. Almost none think that the government will step in to bail out a university that is on the brink of collapse, which reflects the position of the current administration.

The sense that the walls are closing in on higher education under its current funding model has been sparked both by the ongoing decline in the real-terms value of a frozen domestic tuition fee, structural losses on numerous other activities (including, in many cases, research) and ¨C crucially ¨C a sense that international student revenue is no longer a tap that can be turned endlessly higher.

With early signs of a decline in international interest, and a number of policy measures that make the UK a harder or less attractive study destination, an analysis for?Universities UK?(UUK) has suggested that, if international numbers?were to fall by between 13 and 18 per cent, four-fifths would be in deficit.

The frustration of those who have been highlighting the seriousness of the situation is acute. Vivienne Stern, chief executive of UUK, has spoken glumly about ¡°losing a battle we spent more than a decade winning¡± on the importance of international students, while Glen O¡¯Hara, a historian at Oxford Brookes University who has been vocal on the issues facing higher education, asked on social media: ¡°What even is the point of writing and researching if there is zero impact?¡±

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It is a valid question. There has long been an assumption that any serious intervention to address the broken funding model will have to wait until after the next general election ¨C likely to be this November ¨C but also a sense that, even then, it will not be a priority issue, whoever is in power.

And yet thriving universities are fundamental to the success of the UK. While the direct human cost of higher education¡¯s financial time bomb is very different from the Post Office scandal, a continued failure to wake up to a crisis in front of us would be a political failure of unforgivable proportions.

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john.gill@timeshighereducation.com

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<ÁñÁ«ÊÓƵ class="pane-title"> Reader's comments (1)
The UK tuition fee is paid for by students and tax payers (that portion by government in guaranteeing the student loan and picking up students who don't repay). so the real question is - why should students and taxpayers pay more to support independent higher education institutions? That's why politicians won't invest political capital in raising fees to support struggling institutions. Can those struggling institutions show that they have created lean and productive operating models - if not, then why would a bail out create a sustainable institution going forward, rather than just using more taxpayer funds without return. Independence of HEIs is to be cherished - and with this brings the responsibility to be creating and maintaining financially sustainable institutions - and by extension this means that if the current model isn't sustainable then change is needed. Waiting / relying on tuition fee increase is folly. Instead the delivery and support models need to adapt - how many struggling institutions can say they have changed/transformed rather than just cut away at staff? Herein is the significant challenge - creating the leadership, the capability, and the consensus around evolving the HE model in our institutions, rather than waiting for a third party to increase income.
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