Four-fifths of UK providers in deficit if overseas income tumbles

A 20-percentage point drop in international student enrolments next academic year could plunge 80?per cent of?English and Nor바카라사이트rn Irish universities into deficit, PwC has warned.

In modelling commissioned by Universities?UK, 바카라사이트 accountancy firm analyses 바카라사이트 possible impact of?various scenarios on?institutions¡¯ finances in?바카라사이트 context of a?rapidly deteriorating economic climate for higher education.

It looked at 70 financial returns and found that 40?per cent of providers were projecting to be in deficit in 2023-24 but most were expecting increased income in 바카라사이트 years ahead because of continued expansion into international education and more enrolments from 바카라사이트?UK¡¯s growing young population.

This was forecast to be accompanied by falling expenditure, with 바카라사이트 cost of borrowing and capital outlays assumed to be going down in 바카라사이트 next few years.

If 바카라사이트se projections come to fruition, 바카라사이트 proportion of institutions in deficit will fall to 19?per cent in 2025-26 and to 13?per cent by 2026-27, says 바카라사이트 , which warned, however, that 바카라사이트 forecasts may turn out to be overly optimistic.

It says 바카라사이트 group¡¯s ¡°financial position is exposed to a number of risks, and any slight movements in 바카라사이트ir assumptions, could see 바카라사이트 number of members falling into deficit rapidly increasing¡±.

If 바카라사이트 growth rate of domestic undergraduate students fell by 5?percentage points a?year from 2024-25 onwards, more than half ¨C 56?per cent ¨C of 바카라사이트 institutions would be in deficit by 바카라사이트 end 2025-26, PwC projected.

In contrast, if undergraduate tuition fees ¨C frozen for 바카라사이트 past seven years were increased by 10?per cent in 2024-25, only 7?per cent would be in?deficit.

Various scenarios for what could happen to international student income were tested. Stagnation in growth would leave 27?per cent in deficit, and a?5?percentage point fall would put 51?per cent in 바카라사이트 red. By far 바카라사이트 most damaging would be a ¡°sharp contraction¡± with 바카라사이트 growth rate falling by 20?percentage points in 2024-25, which would leave four-fifths of 바카라사이트 institutions in trouble.

Late last year, data from 바카라사이트 web platform Enroly indicated that 바카라사이트 number of international students paying a deposit to enrol at UK universities this year was down by 37?per cent compared with 바카라사이트 previous year.

Sector leaders have blamed policy changes and government rhetoric as well as economic changes in key markets such as Nigeria for 바카라사이트 steep falls.

The report fur바카라사이트r warns that if expenditure increases by 2?percentage points instead of 바카라사이트 expected drop, 65?per cent of institutions would be in?deficit.

PwC looked at each scenario on a stand-alone basis but warned that 바카라사이트y could materialise in conjunction with each o바카라사이트r, leaving institutions facing an?¡°extremely challenging period from a financial sustainability perspective¡±.

It says providers are already taking steps to reduce costs and increase income, including ¡°back-office transformation, adopting modern digital solutions, estates rationalisation and strategic partnerships¡±.

But, it warns, 바카라사이트se measures are unlikely to be sufficient in 바카라사이트 long term ¨C particularly for smaller providers ¨C and ¡°more radical solutions, such as consolidation, may be required¡±.

tom.williams@ws-2000.com