Are universities too big to fail or could some go under?

As thousands of students head to campuses this weekend, there are warnings parts of the sector are close to collapse. Alastair Mc Call argues why fees can,t save the day this time

- Alastair Mc Call

Cars loaded with clothes, mattress toppers, table lamps, posters, pots, pans and other paraphernalia of student life will hit the motorways today as the latest year group of freshers heads for campuses across Britain. Meanwhile, another cohort will be checking the latest Good University Guide to make their choices for their Ucas forms.

But if the dire warnings of last week are to be believed, will some of these institutions even be open for business in the next few years? The higher education sector is at immediate risk of collapsing under debts created by a decade of frozen UK students’ tuition fees and a shrinking number of overseas students scared off by the hostile environment towards foreigners, which include spiralling costs for visas and fees.

That there is a funding crisis in higher education is beyond question. The 40 per cent of institutions expected to report a deficit this year can attest to that; further evidenced by the multiple redundancy programmes currently in place which are seeing an exodus of staff, including academics, at many universities. The crisis spans the entire sector, from highly selective Russell Group universities to some of the fasterexpanding modern universities, created since 1992.

The University of East Anglia was the most high-profile university to hit financial problems last year, recording a £74m loss in the year to July 2022. More recently, Lincoln went public about the “financial headwinds” it was encountering, and there have been widely reported restructurings, budget cuts, and/or job losses at Goldsmiths, University of London; Coventry; York; and Cardiff. Many others, Russell Group universities among them, aren’t in the headlines yet, but could soon be as courses stop running and departments close.