Funding shortfalls for English students ‘to double by 2030’

The amount that English universities supplement the cost of undergraduate students will double by the end of the decade without government policy changes, according to a new report.

The Russell Group, which produced the study, warned that the sector will have to make “difficult and unwelcome decisions” if a more sustainable approach to funding is not adopted.

It said that educating the “skilled workforce of the future” and producing word-class research was becoming increasingly difficult because costs are not being met by funding from tuition fees and government grants.

Researchers from the group of elite institutions estimate that English universities supplemented the cost of undergraduate education by an average of £2,500 per student per year in 2022-23.

And that without a change in government policy and with tuition fees capped at £9,250 amid continued inflation, it projects this will increase to £5,000 per student per year by 2029-30.

“If action isn’t taken to address growing funding shortfalls in education and research, then universities will likely be forced to take difficult and unwelcome decisions,” Lily Bull, the Russell Group’s policy manager, told Times Higher Education.

“To do nothing is also an active decision – a policy choice to disinvest in our higher education sector.”

She said three separate parts of the sector could be impacted – the student experience, research outputs, or the wider benefits universities bring to their local communities.

The Russell Group is calling for the Westminster government to work with it to come up with a more sustainable solution that offsets the impact of inflation on per-student funding, is fair and affordable for students and taxpayers, and safeguards the pipeline of science, skills and innovation.

Researchers found that UK students paid, on average, less in fees than it costs for universities to deliver their courses in the last academic year – including an annual average of £23,500 to educate a medicine student, £14,000 for those on science-based courses, and £10,500 for classroom-based students.

The report also showed that UK universities received 69 per cent of the full cost of research from funders – down from 76 per cent in 2014-15.

As a result, the amount they invested to subsidise research activity rose from £2.9 billion to £5 billion over this time.

The study examined how universities could address the funding shortfalls in other ways, but found them all to be “highly impractical or even impossible”.

“Universities aim to run as efficiently and effectively as possible, but as funding shortfalls grow it will become increasingly challenging for most to make the scale of the necessary additional savings without significantly changing their business model,” said Ms Bull.

“However, changes like this could affect research outputs, international competitiveness and ultimately the ability of institutions to achieve their missions and deliver returns to the economy.

“This is not something that any university would want to do.”

patrick.jack@timeshighereducation.com