New essay published on the financial sustainability of higher education institutions

The Russell Group has highlighted the urgent risks to the sector’s long-term financial health, in a new report by the Higher Education Policy Institute (HEPI) presenting options for the future of higher education funding. 

In the collection of essays published today (Thursday 11 April), expert voices across the sector propose a range of potential funding models for undergraduate education, while exploring the growing financial pressures and sustainability concerns facing the UK’s universities. 

In the final chapter, ‘Financial sustainability of higher education institutions’, Lily Bull, Policy Manager at the Russell Group, delves into the key challenges to the sector’s long-term financial resilience; with new Russell Group analysis suggesting English universities would need to find an extra £6.5 billion by 2030 just to maintain the same levels of domestic education and R&D. 

Commenting on the new report, Lily Bull said:

“Throughout the last decade, amid a series of policy changes, many working in the sector have been warning of a significant impact on the long-term financial resilience of our universities. We are now seeing this play out as the first signs of mass change – course closures and redundancies – are becoming evident. Without intervention, there will not only be an impact on individual students and staff as choice is restricted and jobs are cut, but these changes will inevitably alter the overall university offer – including the R&D that is so vital to the growth of the UK economy and our position on the world stage. 

“Today’s report raises some interesting ideas on the potential direction of reform for the sector. Now is the time to explore what we want our universities to look like for future generations, and how we can create a more resilient sector now and into the future. We are keen to work with the Government to develop a long-term, sustainable funding system that works for both students and taxpayers”. 

The essay, ‘Financial sustainability of higher education institutions’, can be found within HEPI’s collection How should undergraduate degrees be funded?, edited by Rose Stephenson and available now on the HEPI website. 

The report comes as financial pressures build in other areas: with vital cross-subsidy from international student tuition fee income looking increasingly vulnerable, and an increase in spending on additional student support, as cost-of-living challenges persist and maintenance loans fail to keep pace with inflation. 

See the Russell Group’s University Business Model Explainer for more details about the funding model for research-intensive universities in the UK.