The future is looking bleak for many UK universities, and by 2025-26 the sector faces a net income reduction of £3,445m, according to the Office for Students (OfS).
Without ‘significant mitigating actions’ the OfS said the sector-level deficit could be -£1,636m, with up to 72% of providers running a deficit and 40% having low liquidity.
Ultimately the OfS has said the risks mean universities will need to start to look for merger partners or other structural changes, to ensure their financial future.
The big decrease in overseas students is having an effect. There were 16% fewer applications for visas in 2024, compared to 2023.
Rosalind Gill, Head of Policy and Engagement at the National Centre for Universities and Business, said: “Universities are one of the UK’s greatest strengths and a key driver of innovation, skills, and economic growth. The new report from the Office for Students hammers home the scale of the crisis faced by our nation’s world leading institutions. Increasing employer National Insurance contributions has also made the situation more challenging, significantly raising staffing costs for universities by £372 million a year.”
