Universities demand UK government finds cash for sector

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The main lobby group for UK universities has called on the government to find more cash for higher education after education secretary Bridget Phillipson warned that there were no quick fixes to the sector’s looming financial crisis.

Dame Sally Mapstone, president of Universities UK and vice-chancellor of St Andrews, on Thursday said ministers could not avoid the need to invest in universities after a decade of frozen tuition fees had left almost all facing a financial “crunch”.

“Our message to government is clear, our universities can be, must be, key partners in achieving the goals you have set out. We can work with you to drive growth, opportunity and equality but we need your investment and your support to do so,” she told UUK’s annual conference in Reading.

Mapstone’s warning came moments after Phillipson told delegates that the government had no “immediate” plans to ease universities’ plight ahead of the October 30 Budget, while promising to look at “all of the options”.

“As you all know too well, these are complex problems, there are no easy answers or quick fixes. So I can’t promise immediate or painless resolutions,” she said in a video-link address.

UUK, which represents more than 170 universities, has repeatedly called on the government to increase the £9,250 annual tuition fee for domestic students. It has been frozen for almost a decade, leaving many institutions struggling to make ends meet.

Mapstone said the fee was now worth just £5,924 in 2012-13 terms, meaning that funding per student at English universities was lower than before the maximum tuition fee was increased to £9,000.

Frozen fees, reduced government grants and a sharp decline in lucrative overseas postgraduate students following an immigration crackdown by the previous Conservative government have left some universities on the brink of bankruptcy.

Phillipson has since July assured international students they are welcome in the UK. But the government has not reversed the ban on postgraduates bringing family members that contributed to the decline in numbers.

Labour has also asked the Office for Students, the regulator in England, to prepare to help universities in financial difficulties restructure or merge as the sector adjusts to a more challenging long-term outlook following a decade of expansion.

Mapstone said that while universities “genuinely appreciated” Labour’s change of tone and its promise to look at the sector’s financial stability, they were not enough to assuage fears, with more than 50 institutions now cutting jobs or courses. 

“We need to continue to be very clear about the magnitude and urgency of the funding sustainability challenge that so many of us are having to confront on a daily basis,” she added.

Mapstone cited a report commissioned by UUK from consultancy London Economics that estimated universities generated more than £250bn a year for the economy and offered the Treasury a high rate of return on investment.

“Our universities generate over £14 of economic impact for every £1 of funding,” she said, quoting from the report. “This is around eight times higher than the average return of £1.80 for each £1 of public investment for other government projects between 2010 and 2022.”