Recent reports show some UK universities are experiencing financial difficulties and have had to scale back spending. We've compiled a list of some of the most affected universities and how they've got there.
But first, what do the reports say about UK universities right now. Last year the Office for Students reported that roughlty a third of the 150 UK universities and higher education institutions only had enough money to last the next 100 days meaning they had to rapidly decrease spending. They also noted that up to 72% of unis could be in financial difficulty by the end of this year telling us that this is not a local issue.
Universities are funded by a wide range of sources. The majority of a unis finances, 52%, come from tuition fees with half of that amount being made up by international students. The rest is made up of a mixture of research grants and direct government funding. Unis in Scotland, Wales and Northern Ireland have slightly different methods of funding such as tuition in Scotland being paid for by the Scotish goverment rather than the student directly. Many universities are claiming that their precarious financial position is caused by tuition fees not keeping up with inflation and the rising cost of salaries, building maintenance and other operational costs. There is also a decrease in the number of new university applicants post pandemic with some young people looking at alternatives to university such as apprenticeships, going directly into work or taking a gap year. This all has reduced income for some universities.
This is expected to have an effect on the quality of higher education with some universities having to cut spending leading to less contact hours, lower quality facilities or courses being eliminated. There is also pottential for some universities to merge together in order to gain a better financial position. It also has the effect of placing more pressure for UK universities to attract international students as they can be charged a higher tuition fee. Many universities now have dedicated staff and services designed to attract elusive international students in order to maintain financial stability. Some people argue that this is 'unfair' for UK students as it may appear the university places international students in higher regard than domestic applicants.
Which UK unis are in financial trouble?
Cardiff University
Cardiff University, the largest university in Wales and a member of the prestigious Russell Group, announced they had a £31.2 million deficit between 23-24 and could run out of money within 4 years if nothing changes. Because of this they announced 400 staff would be made redundant which represents 10% of their workforce. Along with this they've also cut some subjects such as music, nursing and modern langauges in a bid to reduce spending. Unions representing some of the staff at the uni have said that the reduction in staff numbers will increase the staff to student ratio and lead to more stress for staff and make it more difficult for students to learn. Some have also said that the cutting of the nursing course could worsen the shortage of nurses in Wales.
University of Huddersfield
The West Yorkshire university is still relatively young only being founded 1992, however this hasn't prevented them from having financial challenges. In May last year they announced they will cut 200 jobs and get rid of up to 12 courses including geography, sociology and maths. The annoncement was met with outrage from students who protested the decision sighting a reduction in educational quality. Some students suggested reducing the salaries for the highest paid staff at the uni, such as the vice-chancellor, on online blog sites.
Sheffield Hallam University
Sheffield Hallam University said that external pressures including reductions in the amount of international students let into the UK by the government has led to them needing to reduce staffing costs by around 20%. Last year they announced that up to 400 jobs could be made redundant as part of these cost cutting measures.
University of York
Another member of the Russell Group, the University of York faced a £24 million deficit in their budget last year leading them to take measures to avoid bankruptcy. By December last year, the university already got rid of 272 staff through a voluntary redundancy scheme announced earlier in 2024. The uni wants to save £34 million in order to return to a financial surplus through another round of voluntary staff redundancys, increasing domestic undergraduate rates and seeking further commercial and research opportunities. It is important to note that at time of writing the uni does not intent to reduce or cut any of their courses or subjects when looking to save money. Unions have stated that the reduction in staffing numbers could leave a negative impact on teaching quality and overall staff and student wellbeing.
Kings College London
It should be clear by now that even the most prestigious institutions are not immune to budget diffiuclties. In December of last year Kings College London announced a £19.3 million deficit in their budget which was a decrease from the year before.
University of Aberdeen
This Scottish university found itself in financial difficulties at the start of last year leading them to take decisive measures. The uni has been forced to make up to £14 million in savings through reducing the number of staff and decreasing expenditures for new facilities.
How things could be fixed?
There is currently no clear, one size fits all solution to ensure the long term viability for higher eductation institutions in the UK. Some universities suggest increasing domestic tuition fees further in order to make up for rises in inflation and the increased cost of living, however this may have the undesired effect of reducing applications leading to less students attending university. Another solution could be to remove some of the visa restrictions imposed by the former Conservative government and increase the number of international students studying in the UK as a way to increase tuition revenue and in a way, 'subsidise' domestic student's education. One of the more common solutions suggested by students, staff and unions is for the government to increase their contribution to higher education institutions through more direct funding siting the positive economic impact UK universities have with research into new fields, regional employment and the often higher tax revenues university-educated people provide.
Information correct as of writing (29th March 2025)
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