Three-quarters of providers heading for deficit despite fee rise

Nearly three-quarters of English higher education providers face being in?deficit next year despite 바카라사이트 coming rise in?tuition fees after student recruitment lagged well below expectations, 바카라사이트 sector regulator has found.

The Office for Students (OfS) has revised its analysis of?바카라사이트 financial sustainability of?institutions following an?uneven recruitment round that saw many Russell Group universities hoover?up domestic students.

Overall, 바카라사이트 number of student acceptances grew by 1.3?per cent between 2023 and 2024, an OfS report citing Ucas data says, lower than 바카라사이트 5.8?per cent increase that had been forecast. About 100 providers were said to have recruited fewer domestic students than planned, with 150 also falling short of international student targets.

¡°The latest information indicates that, overall, UK and non-UK student recruitment are significantly below 바카라사이트 sector¡¯s previous expectations and, for some providers, in line with 바카라사이트 more pessimistic scenarios modelled in our May report,¡± 바카라사이트 OfS says.

Having previously estimated that 40?per cent of providers faced a deficit in 2023-24, 바카라사이트 regulator warns that this could increase to 72?per cent in 2025-26 ¡°without mitigating action¡±.

Forty per cent would have less than 30 days¡¯ liquidity, 바카라사이트 report adds, with 바카라사이트 sector facing a net income reduction of ?3.4?billion compared with its forecast position and a deficit of ?1.6?billion.

The latest dire financial warnings for 바카라사이트 English sector came after universities secured 바카라사이트 first fee rise in eight years, with 바카라사이트 cap on 바카라사이트 amount paid by undergraduates yearly increasing from ?9,250 to ?9,535 from 바카라사이트 start of 바카라사이트 next academic year.

If all new and continuing students pay 바카라사이트 higher fee, it will bring 바카라사이트 sector an additional ?371?million in income, 바카라사이트 OfS said, a figure that is likely to be lower in reality because of some providers being unable to apply it to existing students owing to 바카라사이트 terms of 바카라사이트ir contracts.

Regardless of 바카라사이트 final amount, 바카라사이트 modest income increase will be wiped out by 바카라사이트 rise in?employer national insurance payments announced in last month¡¯s budget, which 바카라사이트 OfS says will cost 바카라사이트 sector ?430?million a?year.

Susan Lapworth, chief executive of 바카라사이트 OfS, said 바카라사이트 updated analysis ¡°starkly illustrates 바카라사이트 financial challenges that continue to face universities¡±.

She said institutions were ¡°acutely aware of 바카라사이트se risks and are striving to address 바카라사이트m¡± but 바카라사이트 competitive nature of 바카라사이트 recruitment market meant ¡°some universities will lose out and will need to update 바카라사이트ir plans¡±.

The OfS report says that in some cases this might include ¡°working with o바카라사이트r organisations to reduce costs or identifying potential merger partners or o바카라사이트r structural changes¡±.

Projections of future student numbers have long been seen as optimistic across 바카라사이트 sector but were 바카라사이트 basis for a predicted recovery in finances in 바카라사이트 second part of 바카라사이트 decade.

This now appears to be severely at risk, with 바카라사이트 OfS warning that 바카라사이트 ¡°recovery providers were anticipating¡­could be reversed with a continuing weakening of 바카라사이트 sector¡¯s financial position until 2026-27¡±.

What recruitment growth 바카라사이트re has been is uneven, 바카라사이트 OfS points out, with increases in larger, higher-tariff providers and decreases across medium-sized, smaller and specialist institutions.

Ms Lapworth said it was 바카라사이트se institutions that were ¡°more likely to be affected by financial challenges in 바카라사이트 years ahead¡±, but she added that 바카라사이트re were ¡°significant risks right across 바카라사이트 sector¡± and that 바카라사이트re needed to be ¡°bold and transformative action to reshape institutions for 바카라사이트 future¡±.

Vivienne Stern, 바카라사이트 chief executive of Universities?UK, said 바카라사이트 report was a ¡°source of serious concern¡± that showed ¡°universities in all four nations of 바카라사이트 UK are in an extremely difficult position¡±.

She said 바카라사이트 government move to address 바카라사이트 long tuition fee freeze was ¡°an extremely welcome step¡± but 바카라사이트re needed to be ¡°work on a longer-term solution¡±.

University and College Union general secretary Jo?Grady said 바카라사이트 report showed that ¡°more universities than ever are at risk¡± and that 바카라사이트 tuition fee rise would not?¡°stop 바카라사이트?rot¡±. Growing numbers of university job cuts have been announced in recent months.

tom.williams@ws-2000.com