Even hiking their fees might not be enough for universities to turn a profit
Universities are in an existential crisis, losing money and the quality of their teaching. But even the option of hiking fees doesn’t look feasible at the moment, writes Will Cooling
As students across the UK collect their A-Level results, few will be aware that the universities many will be entering in the autumn are already struggling to meet the grade.
British higher education is on its knees. Academics are being asked to stretch themselves ever thinner as not just staff to student ratios increase, but their working conditions worsen. The range of subjects being taught and studied continues to narrow as desperate institutions try to focus their offer on the most popular subjects. And students struggle to both study and live well, as the costs of student life continue to grow beyond the support available to those with no access to the “Bank of Mum and Dad”.
At the heart of this problem is the same issue currently affecting all public services; the lack of sufficient funding. Theresa May’s decision to deny universities an increase in tuition fees to keep pace with inflation was a painful blow; since 2020, it has become an existential one. We are now at the point where a £3000 increase is necessary to restore tuition fees to their 2012 value, in real terms. And that’s before considering that universities have endured additional cuts to the funding they receive directly from the government over the past decade.
It is possible that universities may have been able to limp along, gradually becoming worse in ways that while unpleasant and self-defeating, would not be immediately apparent. But the surge in inflation has brought things to a crisis point, with more and more universities sliding closer to bankruptcy. In 2016 only 5 per cent of universities were running at a loss. As of 2022, that figure had risen to 55 per cent.
Worse is to come as the noughties baby bulge hits higher education at full force, with more eighteen-and nineteen-year-olds looking to enter university. Unable to afford the investment to make such expansion sustainable, this surge in applicant numbers risks either fiercer competition for places or a degraded student experience as institutions take on more students than they can afford to teach.
It should come as no surprise that thirteen years of Tory-led government has so thoroughly trashed higher education. Clement Attlee, Harold Wilson and Tony Blair all had to push through major reforms of the sector due to the failure of their predecessors to fund and develop universities to meet the demands placed on it by wider society. It is no coincidence that in real-terms, funding is now at a level not seen since the dark days of the 1990s. Rishi Sunak’s only idea to mitigate the crisis is a poorly thought gimmick about denying funding for courses that fail a simplistic statistical test for employability. So Sir Keir Starmer will undoubtedly have to make an intervention as dramatic as his Labour predecessors, if British universities are to survive let alone thrive.
While there are undoubtedly areas where higher education would benefit from some structural reform, what the sector needs right now is emergency funding to plug the gaping hole left in university budgets. But it’s hard to see a new Labour government spending much more on higher education when more broadly used services such as hospitals and schools are at breaking point. The party is also terrified that voters won’t tolerate higher taxes.
Vice-Chancellors have an answer to this problem; just restart increasing tuition fees. But the scale of the raises required, especially if they were tasked with also funding a return of maintenance grants and a more equitable repayment restructure, would be a bitter pill to swallow for even the most committed believer in co-payment models. Starmer only recently abandoned his leadership manifesto pledge to retain Jeremy Corbyn’s policy of abolishing tuition fees. Even this Labour leadership may think increasing them substantially is just a fight too far with its left-wing.
If that’s the case then the gradual bankruptcy of Britain’s universities will give way to something altogether more sudden. And we will destroy one of the few industries where Britain remains a world-leader.