Higher education demands clarity on government鈥檚 growth-driving industries

A growing number of reports show that UK universities are facing significant financial challenges, with some appointing management consultants to help stabilise their operations and advise on consolidation measures. 

Modelling from the Office for Students also suggests that nearly three quarters (72%) of higher education providers could be in deficit by 2025/26, and 40% would have fewer than 30 days’ liquidity. 

Lisa Randall, partner and National Head of Higher Education at 91探花, comments: “With financial sustainability and increasing deficits a growing trend amongst UK universities, cost pressures, staffing and business transformation all remain key issues for higher education. Running business as usual activities alongside significant cost saving projects is never easy, no matter the industry. 

“However, with a backdrop of falling international student numbers and growing inflationary pressures, for some universities, this is resulting in the perfect storm of falling income, rising operational costs, and demand for certain provisions failing to meet targets. Support from outside the sector is therefore inevitable, as resourcing to aid baseline assessment, evaluate and then deliver tangible transformation thereafter takes dedicated time, which not all universities have in their staffing pool.” 

She added: “The financial challenge is unprecedented with demographics showing a decline in 2030 in new university entrants, therefore any planning now needs to look long-term at future student demographics and align with the government’s eight growth-driving industries. We’re expecting an update on the Industrial Strategy in the Government Spending Review in June, so this will hopefully enable institutions to plan with more certainty and create efficient and sustainable systems.”