The latest OfS update on financial sustainability in Higher Education is deeply concerning. London is home to the most diverse mix of high-quality higher education providers of any city in the world, an asset that is now threatened by the incredible pressures facing the sector. With deficits spiralling and liquidity depleting, the future of higher education in London and across the UK is in serious jeopardy if a sustainable funding solution is not found soon.
Until recently, London’s universities have led the way in increasing income from new sources of revenue (particularly international student recruitment) to stave off funding shortfalls caused by a double-whammy of cuts to real-terms income from domestic undergraduates and ingrained funding deficits within UK research. The unsustainability of that model is now coming to bear and universities, students and the communities they support are liable to suffer the consequences.
Most at risk are London’s wide variety of medium and small and specialist institutions, as well as those who do the most work in terms of social mobility. This is despite them being some of the most financially efficient in the sector. The ability of these institutions to make further cuts without major impacts on the student experience is extremely limited. Furthermore, financial insolvency for a higher education provider comes with incredible risks for the wider sector through potential contagion, as well as massive uncertainty given the lack of appropriate insolvency processes or a special administration regime.
The UK’s higher education sector has a crucial role to play in helping the government achieve its missions of growing the economy, providing opportunity and restoring the effectiveness of public services, not least through its training, research and civic impact. The financial situation the sector faces must be addressed if our universities are to continue delivering outstanding returns for the nation.
