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22nd February 2019

Tuition fees create uncertainty over financial future of UK universities

The lowering of tuition fees could lead to some UK universities closing in a ‘worst case scenario’ situation if alternative funding is not provided
Tuition fees create uncertainty over financial future of UK universities
Photo: David Dixon @ Geograph

Universities are preparing for a difficult financial future in the event that tuition fees do not rise to meet growing demands.

The Vice-Chancellor of Cardiff University, Colin Riordan, has planned to cut one in 14 posts over the next five years due to a strain on funding for Russell Group universities. Cardiff reported a £22.8 million deficit for 2017-18 and announced on 11th February that 7% of the university’s staff were to be dismissed.

In the same year, Cardiff faced an expenditure increase of 5.2% whilst its income increased by 2.5%, creating an obvious gap in funding. A rise in utility costs, rent, and staff costs were also said to be factors which contributed to the deficit.

The BBC reported that if the “growing expectation” of tuition fees being cut down to a sum as low as £6,500 materialises, institutions may be at risk of collapsing. Universities are becoming increasingly paranoid, as a reduction in tuition fees would not necessarily be subsidised by government spending.

The director of the Higher Education Policy Institute, Nick Hillman, stated that every £1,000 subtracted from tuition fees would roughly equate to a billion being removed from the current pool of funding.

He also described the loss of fees would be further exacerbated by universities struggling to recruit both domestic and international students. He cited Brexit as being a barrier for foreign students wanting to study in the UK.

Whilst allowing more students to enroll on courses is an option, this option has been criticised by Sir Anthony Seldon, Vice-Chancellor of the University of Buckingham. Seldon condemned “juggernaut universities” who were wishing to expand, as this would leave other institutions severely lacking funding.

Exeter and UCL have seen the largest increase in undergraduate student numbers, expanding by 74% and 65% respectively. Conversely, London Metropolitan University shrunk by 62%, with the University of West London facing the same issue, experiencing a decrease of 44%.

The potential financial crisis would primarily be concentrated on and felt by smaller institutions, with larger universities often serving as a linchpin to their local communities.

Universities may have to resort to merging with other institutions or selling off valuable assets before collapsing entirely. The BBC reported that universities, upon registration with the Office for Students, must provide a “student protection plan”. This plan outlines how students can continue their courses, even if the course or the university itself closed.

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