One in four UK universities faces serious financial problems within five years because of an expected decline in domestic and international student numbers, a vice-chancellor has predicted.
Speaking at the Higher Education Policy Institute’s annual conference, David Green, who has led the University of Worcester since 2003, said that a quarter of institutions would “get into significant financial difficulty” by 2022 if higher education policy remained unchanged.
Speaking to Times Higher Education later, Professor Green said that the funding squeeze could force some institutions into mergers or even closure.
He predicted that many universities would struggle to recruit enough UK students, in light of a demographic dip among the young population that was expected to last until 2022, and that others would suffer from poor international student recruitment, assuming, following the general election, that the Conservatives are able to implement the tougher student visa restrictions promised in their manifesto.
“It will become significantly more difficult to get international students, which account for about 12 to 13 per cent of universities’ income,” said Professor Green, who pointed out that “some institutions are very dependent on that income".
The rise of degree apprenticeships, in which students combine part-time study and a job, will also present another problem for universities, the vice-chancellor said.
“If degree apprenticeship programmes take off, there will be many fewer full-time students,” he told THE, saying the “day-release” model of apprenticeships, in which apprentices spend one day a week on campus, would lead to falling incomes for universities.
With shrinking numbers of undergraduates in the sector, a decrease in student numbers could push some universities into a downward spiral, threatening their very existence, added Professor Green.
“Success breeds success and failure is a vicious circle – failure in this environment will be quite quick,” he said. “Of course, some universities will be very successful [at recruiting students] in this environment, but others will not. When people talk about a market in higher education, this is what they really mean."
Professor Green pointed to the growing pressures on university balance sheets highlighted by the Higher Education Funding Council for England’s latest financial health check, published in March 2017, which revealed that 27 institutions saw a real-terms fall in income between 2014-15 and 2015-16.
While the sector reported a surplus of £1.5 billion overall, or 5.2 per cent of total income, the report cited a “considerable disparity” between institutions, with one unnamed institution recording a 7.2 per cent deficit.
While the prospect of university closures was a possibility, Professor Green predicted that mergers were more likely.
“If policy goes in the current direction, there will be a lot of trouble,” he said.
