A “significant number” of universities in England must revise their business models “to ensure that they are financially sustainable” and adapt to uncertainties and financial risks, a minister has said.
Baroness Barran made the remarks in the House of Lords on Tuesday in response to a question on the sustainability of higher education institutions, as a growing number face financial pressures.
“Indeed, all providers must continue to adapt to uncertainties and financial risks. Ultimately, providers are independent from government and, as such, it is for them to decide how they manage their finances,” the parliamentary under secretary of state for education added.
Government Bail Out
Cross-bench peer Lord Cromwell asked if a major university—such as a Russell group institution—were to face significant financial problems would it be “too big to fail, or would the Government bail it out?”Baroness Barran responded that larger universities are in good financial health, but added, “Of course the Government have a role to play in making sure that student interests are protected in the case of a university failing.”
Lord Cromwell had evoked the “too big to fail” economic theory that some institutions are so large and integral to a nation’s or to the global system that their failure would risk collapsing wider systems and that government should step in to support them.
Reliance on Overseas Students
Universities have reported a fall in overseas applications, according to a survey by the British Universities International Liaison Association (BUILA). Of the 75 universities BUILA polled, 88 percent reported a decrease in postgraduate applications from international students for the September 2024 intake compared to 2023.The fall in applications from overseas students follows the introduction of government restrictions on foreign postgraduate students bringing dependents with them to the UK, the measures forming part of wider plans to cut net migration.
Home Fees Cap
In 2017, then-Prime Minister Theresa May announced a freeze on the undergraduate fee cap for home students at £9,250.There is no government mandated cap on postgraduate or international student fees, and international students are typically charged far more to study in the UK than home students.
Lord Grabiner asked Baroness Barran on Tuesday if the government would consider raising home student fees, saying that “the only way that many universities are able to make it work is by charging some extortionate fees at the graduate non-regulated level.”
The minister suggested that raising fees for home students was not something the government was considering, responding, “We ... have a responsibility to students to make sure that university is affordable.”