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Universities in ‘perilous’ financial situation

Image: Fiona McIntyre for Research Professional News

University of Oxford vice-chancellor discusses “jaw-dropping” situation and calls for review of funding

Higher education is facing a “perilous” financial future and the sector “can’t go on” operating in the same way, the University of Oxford’s vice-chancellor has said.

Irene Tracey, who took over as leader of the Russell Group institution in January, told delegates at a joint Higher Education Policy Institute and Advance HE event in London that there is “a worrying financial future for this sector”.

“The one jaw-dropping thing I’ve learnt in my role in the first three months is just how perilous the higher education sector is financially,” she said on 28 March.

Tracey (pictured, left) added her voice to calls for “a root and branch” review of how higher education is funded, which would also include “a size and shape discussion” of what the sector should look like.

“We’ve got to be really, really honest about the challenges we face in a competitive global higher education world, about the way that we are funding our higher education system,” Tracey said. “We can’t go on like this.”

With the gap between the true cost of an undergraduate degree and the tuition fee funding universities receive for teaching growing larger during the cost of living crisis, more universities and sector bodies have been calling for a change in how universities are funded.

In December, vice-chancellors’ body Universities UK launched a taskforce to work with the government, students, universities and the wider public on how the funding system should change.

Brexit worries

Tracey also warned that the UK is still facing Brexit “travails” seven years on from the vote to leave the EU, and that the University of Oxford had seen applications from students in Europe “basically go off a cliff”.

We won’t know what fantastic European students or scholars…have not applied for posts in our universities, or have and decided they can’t come because of the extra cost of fees now,” she said. “That is a worry for us.”

She said that while universities have “worked around” Brexit-related restrictions on freedom of movement by opening “mini stations” in Europe to keep research connections, “there’s no doubt if you speak to any of the research-intensive Russell Group universities—and those beyond—[that] their overwhelming preference is to stay associated with Horizon Europe, and I really hope that is where we end up landing”.

Elsewhere during the briefing, UUK International director Jamie Arrowsmith said that while there is “a huge amount of work [in universities] that goes on addressing global challenges” like sustainability and climate change, there is “a difficulty and a tension” as the UK’s cuts to Official Development Assistance funding means “the UK’s research funding environment has pivoted away from that approach” in the last year to 18 months.

“That’s a real challenge in terms of how we continue to have that huge global impact on addressing global challenges as well,” he said. “And it’s something we do need to think about in the long term.”