Hepi director cites financial pressures and international political climate as challenges
There is a “real risk” that a UK university will go bankrupt in 2024 because of the challenging financial climate and international political tensions, the head of the Higher Education Policy Institute has said.
Speaking to Research Professional News, Nick Hillman said that while many providers were well prepared to weather the storm, some institutions could face difficulties.
“There is clearly a real risk that a university could become insolvent in 2024 because of a mix of factors—including the underfunding of home students, slackening demand and higher interest rates, not to mention the tense geopolitical situation,” he said.
Because domestic tuition fees have not risen in line with inflation after being capped at £9,250 a year, income per student for some courses falls short of teaching costs. Meanwhile, Ucas figures suggest that the number of students accepted at universities for the 2023-24 academic year has fallen—with both domestic and international numbers down.
Plugging financial gaps
Many universities plug financial gaps in their income by accepting international students, who pay much higher fees than those domiciled in the UK.
“These issues affect individual institutions in different ways and many universities remain financially secure, but we have a big and diverse higher education sector and a minority of universities are undoubtedly under the cosh financially at the moment,” Hillman said.
There are very few recent examples of UK higher education institutions closing down. In July 2019, the private provider GSM London—formerly known as the Greenwich School of Management—went into administration, and earlier that year Heythrop College, formerly part of the University of London, closed permanently. There have also been a number of mergers between providers.