Number of English universities in financial deficit increases

By David Rhodes
BBC News

image copyrightGetty Images
image captionStudents in England currently pay £9,250 in tuition fees

The number of universities and colleges in England with a financial deficit has jumped by almost 70% in just one year.

In 2017-18, 32 higher education (HE) providers spent more money than they received in income, an increase from 19 providers in 2016-17, analysis by BBC News has found.

The Universities and College Union (UCU) said rising deficits had resulted in cuts to staff and student support.

The Department for Education did not respond to a request for comment.

A spokeswoman for UK Universities, which represents HE providers, said members were successfully managing their finances "despite operating in a challenging and uncertain environment".

The number of young people entering higher education has been increasing but the number of HE providers recording a deficit has sharply increased.

A deficit means an establishment is spending more money on day-to-day outgoings than it receives in income during a financial year.

'I'm really worried'

Maria Battul, a second year student at the University of Bradford, said her university's deficit of £12m was damaging students' education.

"I'm really worried about the finances of my university, because in the last couple of years we've seen over 200 staff jobs cut," said Ms Buttal.

"That's meant there are few lecturers able to support students which makes learning more stressful and difficult".

image captionMaria Buttal says cuts have made learning more stressful

Stuart McKinnon-Evans, the university's finance director, said its deficit was due to one-off costs relating to staff redundancies and improvements made to student accommodation.

Mr McKinnon-Evans said the university's plan was to be running a budget surplus by the year 2021.

New swimming pools and libraries

Matt Waddup, head of policy and campaigns at the UCU, said universities faced increasing financial pressure because of wage increases, pension costs and uncertainty surrounding Brexit.

"What we've witnessed is universities with the wrong priorities, as they've taken on more debt to build new swimming pools and libraries, when students say they want more teachers" said Mr Waddup.

A BBC News analysis of data published by the Higher Education Statistics Authority HESA found:

  • One in four HE providers in England recorded a financial deficit in 2017-18, compared to one in 10 in 2012-13
  • In 2017-18, 32 providers in England recorded a financial deficit, totalling £173m
  • Of those 32 providers, 12 had reduced the number of academic staff they employed over the past three years, with the loss of nearly 900 jobs
Higher education providers in financial deficit. England, 2006-07 to 2017-18.  .

Higher education in England is predominately funded through tuition fees, which are currently capped a £9,250 a year.

It has been reported that a government review might recommend tuition fees for English students be cut from a maximum of £9,250 a year, to £7,500.

But UK Universities warned a cut in tuition fees "would create a significant and serious funding gap".

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