Panic stations set in at some cash-strapped universities

Nic Mitchell 22 March 2024

Panic stations appear to have set in across the United Kingdom higher education sector with many universities – from the so-called premier league Russell Group institutions to mid-league players and Scottish universities – issuing warnings about course cuts and staff redundancies. But not all universities are struggling.

At least 15 universities have publicly confirmed they are shedding staff and shutting down courses while many others are “quietly inviting” lecturers to apply for voluntary severance following a sharp fall in overseas students enrolling on postgraduate courses this January, as University World News recently reported.

Many are warning that undergraduate student recruitment could also be well down in the next academic year as the cost-of-living crisis continues to bite and the UK gives mixed messages about whether it wants to cut international student numbers to reduce migration figures before a general election expected later this year.

But how bad are things really across the UK higher education sector?

A glance at the recent swathe of annual reports and financial statements recently published by UK universities up and down the country reveals mixed fortunes for the 2022-23 financial year.

Bumper crops for some

Some higher education institutions, often newer universities which moved from being polytechnics to universities in 1992, look like they had bumper crops last year – particularly in recruiting non-EU international students from target countries identified in the UK government’s International Education Strategy, such as India and Nigeria.

The University of Hertfordshire, for example, saw its international student numbers increase by leaps and bounds to 15,730 last year, or to just over 45% of its total student intake. Numbers grew by 73% from India, 192% from Nigeria and just under 152% from Pakistan, as independent consultant and higher education commentator Alan Preece highlighted in a recent blog calling for more up-to-date data on what’s happening to international student recruitment.

His impatience at the delay by the Higher Education Statistics Agency (HESA) in publishing data on overseas students at different UK institutions for 2022-23 is shared by many in the sector. The figures normally come out in January or February.

Financial reports

In the meantime, annual financial reports offer one of the few ways to discover what is really going on inside UK higher education away from the positive or negative spin of vested interests.

Preece has spent hours trawling through these reports and contrasts the rich pickings for Hertfordshire with results from the University of York, a mid-table member of the Russell Group, which saw its intake of international students soar by 59% during and just after the COVID-19 pandemic and then fall by nearly 16% last year.

York went from a surplus of £14 million (US$17.6 million) in 2021-22 to a reported £24 million deficit in 2022-23 and generated plenty of headlines after the Financial Times revealed an internal memo saying it was lowering admission requirements for some international students in the light of “financial challenges”.

Chinese students more choosy

Dr Cheryl Yu, an expert on UK-China university relations and co-founder of Higher Education Connected, said that York and other Russell Group institutions benefitted from the switch among Chinese students from wanting to “study in the UK” to wanting to “study at the top UK universities”.

And now, in the face of a buyer’s market, Chinese students are becoming even more choosy and this is hitting lesser known institutions.

Yu said that some lower-ranked UK universities “took an easy and quick-win route” and focused on “sales solely through agents rather than a more strategic approach to build sustainable partnerships” and lost market share very rapidly.

“They ignored the need to have a branding and marketing strategy in China.”

She urged British universities to follow the likes of the University of Liverpool and build a strong partnership inside China if they want to continue appealing to Chinese students looking for an international higher education experience.

“China is still open to attracting top-ranked universities to set up branch campuses in China, along the lines of the Xi’an Jiaotong-Liverpool model.

“When a UK university has a much bigger presence in China through meaningful collaborations, naturally more students will choose to study in that particular university,” Yu told University World News.

Picky Chinese students are just one of the challenges facing UK universities, with the University of Kent reporting an underlying deficit of £12 million for last year and saying it expects a shortfall of over £30 million for the current financial year.

Rise in students dropping out

Writing in Kent’s annual financial report, Vice-Chancellor Professor Karen Cox warns that it is not just the “ongoing fierce competition for new students” and the UK government’s decade-long fixed level of student tuition fee level that is causing major financial headaches. Now, cost-of-living pressures have resulted in “an unexpected downturn in the number of students returning to complete their studies after the summer 2022 break”.

The UK has always boasted of the best completion rates for higher education students in the world, but now dropouts are increasing as students struggle to pay the bills and especially the rent, with maintenance loans failing to keep up with inflation and more students forced to work longer hours while trying to study on full-time courses.

Kent University’s financial report said as well as cutting costs by 10% and closing down its Brussels campus this year, as University World News has reported, it has introduced a voluntary severance scheme and is “reducing the headcount in the Division of Arts and Humanities”.

Risk of redundancy

This has been translated by local newspaper Kent Online as putting 58 staff at “risk of redundancy” and the university has been in consultation about phasing out nine courses, including anthropology, art history, comparative literature, English language and linguistics, health and social care, modern languages, music and audio technology, and philosophy and religious studies. “The prestigious journalism course is also set to be a casualty of the cuts,” reports Kent Online.

Steps are also being taken, according to Cox, to “improve student retention and engagement levels”, notably by better reporting and responding to “student attendance behaviour to focus support for all students throughout their studies”.

A spokesperson for Kent University told University World News: “Like many in the sector we face a number of financial challenges, including the fixed tuition fee, high inflation and changes in student behaviour.

“Our 2022-23 accounts continue to reflect this, although we have plans in place to address our underlying deficit and return to a surplus position in the years ahead. This includes ensuring the courses we offer match future student demand and embedding a number of changes over the past year to ensure we operate as efficiently as possible.”

The university also wants to “build more and stronger links around the world”, said the spokesperson.

It’s not all red

However, not all UK universities are in the red and Robert Gordon University in Aberdeen, Scotland, is among those reporting “a strong financial position in the 2022-23 year, recording a surplus for the third consecutive year” and achieving “the highest record of enrolment of international students in the university’s history, exceeding our target of £49.1 million for tuition fee revenue by over 20% with £59.3 million recorded”.

However, even their financial report says: “We are acutely aware that our achievements and ambitions need to be viewed in the context of constrained public sector finances; significant cost-of-living increases; the continued impact of Brexit and the pandemic; and a very volatile recruitment market.”

In contrast with “continued strength and relations in Nigeria as well as an emerging foothold in Pakistan, India and Ghana”, the Robert Gordon annual financial report warns of continued “challenges of recruiting Scottish undergraduates” (despite Scottish-domiciled students being exempt from undergraduate tuition fees, unlike English students).

The university accounts show a shortfall of -9.2% against funded places set by the Scottish Funding Council and failure to recruit to its funded places is highlighted among the risks for the university.

So, it’s not just recruiting international students that is becoming a challenge for many UK universities in the middle of a cost-of-living crisis.

Reliance on international fees

However, until the funding models for higher education in different parts of the UK are fixed and upgraded, worries about future reliance on lucrative international student tuition fees, which subsidise home students and research activities, will continue to keep university financial directors and vice-chancellors awake at night, warns global higher education expert Ruth Arnold.

Arnold is executive director of external affairs at Study Group and a consultant to UK universities and sector bodies and has organised several campaigns, such as #WeAreInternational, to highlight the value of overseas students and help ensure the UK continues to be seen as a ‘welcoming place’ for foreign students.

However, she told University World News she is very concerned that the post-study work visas, re-introduced in 2021 to allow overseas graduates to stay in the UK for two to three years to find work, could be under threat after the UK government ordered a review of the Graduate Route by the Migration Advisory Committee (MAC). This was originally announced in December but has only just started and the committee has been given 10 weeks to complete its investigation and report its findings to the Home Secretary in May.

“Politicians are playing hardball and while it feels absurd that international students and graduates, most of whom return home after studying, should be treated as permanent migrants rather than inward investors or other kinds of valued visitors, a lot of drivers are once again at play [about cutting overseas student numbers to reduce migration figures].

“The difference is that the criticisms [of post-study work visas] are much sharper and there is much more at stake for universities given real term cuts in public funding. While the MAC is deliberating, damage to recruitment is always underway and our current students and graduates feel a chill wind of rejection too,” she warned.

Nic Mitchell is a UK-based freelance journalist and PR consultant specialising in European and international higher education. He blogs at

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