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The year 2024 for universities and students was dominated by dwindling finances, higher costs, and cuts. 2024 turned out to be a slow-motion train crash for staff and students alike. As the year progressed it became increasingly apparent that the newly elected government carried on where the previous one left off. It is largely turning a ‘blind eye’ to the impending crisis crashing over higher education. Yes, there are many big problems left over from the previous government. But the collapse of higher education institutions could become irreparable in 2025 and have profound long-term effects on the reputation of the UK and its economy. Time is running out if the train is to avoid crashing through the buffers.
The gradual erosion and contraction of our university sector began to gather pace over 2024. Now, there are many staff facing an uncertain future and redundancy. Equally, there are too many students struggling to make ends meet and seeking a way out. This overall contraction is unprecedented. Meanwhile the public are unaware of the crisis emerging as reported by Times Higher Education this week with ‘UK university financial crisis ‘failing to register with public’.
Under the banner ‘UK HE shrinking’ University and College Union activists at Queen Mary University, London have maintained a valuable database of the cuts and redundancies over the year. Thousands of staff are expected to lose their jobs.
By the end of 2024, 60% of the sector, 87 universities, are listed as making staff cuts. This is probably an underestimate and it has been argued that all universities in the UK are making some cuts. Many are looking down the barrel of an insolvency gun.
Students feel the squeeze.
There is no doubt that both the current government and the previous government deliberately squeezed both universities and students over the last year. In the case of students, there is a belief by the government that families will pick up the shortfall in finances for their offspring. In reality, this is not the case for the majority (56%) who now work part-time during term time; many for more hours than their class timetable. This trend towards a ‘two tier’ system will continue to widen and further entrench a dangerous class divide.
Feeble government response.
As early as January, the nascent government made promises that things would change when elected. This was particularly evident in an interview with Bridget Phillipson by Laura Kuenssberg. The clear inference was that a ‘no fees’ plan was not being considered and a more progressive payment system would be introduced; a major U-turn from earlier Labour promises. The expanding problem of students having to spend more time in jobs would also be addressed. The return of maintenance grants was not hinted at, but more maintenance support could be reasonably assumed.
None of this happened when in power months later. Instead, students will pay more in extra fees in line with inflation next year but will get a small increase in the maximum maintenance loan, which many students don’t get anyway. Neither will change the worsening situation much. In return, the universities will have to deliver more reforms if they are to get any more funding rises. For an overview of the sorry developments, see TEFS 11th November 2024 ‘Trick or treat? Sticking plaster first aid for universities and students’.
A more progressive payment system is needed for students.
Funding problems can only be addressed with a radical restructuring of how universities and students are financed. TEFS continued in 2024 to call for a fairer system whereby those who benefit from universities contribute to the costs. This means graduates, their employers and wider society. The simplest and fairest way to achieve this would be through a graduate National Insurance levy (see TEFS 10th May 2024 ‘Funding students and Universities: a graduate National Insurance Levy is gaining traction’). This would be more progressive and share the costs more fairly. Instead, the government opted to increase National Insurance payments for all employers. This included universities and put more pressure on them and negated any gains from increased fees. That was a big mistake that will impact economic growth negatively.
Fish of the day.
Most university managements started to embrace the notion of ‘carpe diem’ over the year (misdefined as ‘fish of the day’ by the Uxbridge dictionary probably ascribed to the lesser-known brother, Pliny the confused). The longer version of this Latin phrase “Carpe diem quam minimum credula postero” means “seize the day, trusting as little as possible in the future.” This sums it up well. Senior managements are already grasping what they can when an opportunity arises.
Thus, university management will jump at the opportunity to get rid of staff they don’t like or don’t trust. This will naturally extend down to the departmental level where ‘bullying’ will emerge. Redundancy is being avoided initially as it must be backed by course closures and degree pathway closures. Redundancy means staff cannot be rehired for the same job. However, some may go down the ‘sack and re-hire’ route if they think they can get away with it. Instead schemes of ‘voluntary severance’ will be deployed with thinly veiled threats. All of this has emerged in 2024 and can only accelerate into the new year.
The consequences.
As staff leave their university employers, those left behind are already picking up the pieces. This affects the offering to students who will find courses they expected are removed or merged with other courses in what might be a mishmash of confusion. The most experienced teaching staff are under greater pressure to leave since they cost more.
The research-intensive universities have one eye on funding from REF 2028. This means they continue to prioritise the retention of research-active staff who comply with REF requirements. Teaching takes a back seat as lower cost short-term contract teaching staff are recruited to fill gaps.
One deepening trend is in the stripping out of timetabled contact time with students and the thinning of the curriculum. Some of this is down to a combination of making time for students coping with part-time jobs and cutting courses down. This is a dangerous trend that will damage the reputation of the UK. Expensive degree pathways that require external standards might be harder hit. Already the Universities of Hull, Aston and Reading have decided to cease their chemistry degrees. Others may follow in a move counter to the demand for skills in a key science area for the transition to a sustainable economy.
Seen this before.
There is nothing new in this. Back in 1987, I ended up covering the teaching of three staff on existing courses. They were highly experienced staff who took the so-called ‘voluntary severance’ package and left the UK to take up better positions. Over twelve months I coordinated action to cover the gaps and merged courses. I was in the vice-chancellor’s office asking him to hold off on some cuts for a few months whilst I wrestled with my plan. He agreed to help me. Meanwhile, my head of department hid in his office and refused to help, simply insisting I trebled my personal workload. Staff and students alike were impacted badly. I hate to see this happening again.
Not all universities will feel the cold as much.
It was reported by Times Higher recently that both Oxford’s and Cambridge’s combined surpluses hit £1.7 billion. This means they have the ability to weather the storm for a while. Likewise, other major universities, particularly the Russell Group, will have some reserves and other incomes. However, none can operate for very long posting deficits. In most cases, other activities are generating the surpluses and despite this “both (Oxford and Cambridge) report net cash outflows in operating activities of more than £58 million”. The decline in international students paying more in fees continued over 2024 and will no doubt continue into 2025. Bigger universities have already started to hoover up home students to fill any gaps emerging. Other universities will suffer as a consequence and damage regional economic growth. It’s a mess that could have been avoided.
Office for Students deploys a red flag.
The regulator has little to offer the many institutions running a deficit other than wave a red flag. They simply demand under ‘Condition D: Financial viability and sustainability’ the following,
- Be financially viable.
- Be financially sustainable.
- Have the necessary financial resources to provide and fully deliver the higher education courses as it has advertised and as it has contracted to deliver them.
- Have the necessary financial resources to continue to comply with all conditions of its registration.
Undeterred, and brimming with a distinct lack of confidence, the Office for Students (OfS) used 2024 to dig trenches in anticipation of universities failing. In September they announced a £4m tender for accountants to make up a “framework of suppliers” to assist with any “financial adjustments or transition, including potential market exits”. By December they had awarded three-year contracts to large firms, Deloitte, Ernst & Young, PwC, and KPMG. University managements will fear this intervention that would challenge their autonomy. They will run a mile. Instead, many have already appointed their own consultants to get a grip on the situation.
Privatisation escape route.
Under the current funding regime, TEFS has long predicted a drift into the privatisation field of play (‘Privatisation storm looms for universities’ September 26, 2021). The current crisis makes this even more likely. It’s a simple way to make major cost cuts to staff pay and avoid pension contributions. Coventry University is no stranger to controversy in this regard. They set up a fee-paying parallel institution called CU Coventry back in 2012 as a wholly owned subsidiary of Coventry University that offers degrees. The Guardian reported it as “No frills university college offers half price degrees”. The staff have lower pay and fewer benefits such as a defined benefit pension scheme. This gives the university a way out of trouble. Sure enough, it was reported this month that ‘Coventry to axe 92 jobs and transfer academics to subsidiary firm’. They will lose access to the Teachers’ Pensions Scheme. The implications are obvious.
Thus other universities spiralling into trouble might simply allow themselves to become insolvent and let all staff go. Relaunching another privatised operation (such as CU Coventry ) and rehiring cheaper staff becomes an escape route. The OfS might be unable, or unwilling to stop this if the courses for students are able to continue in another form. They may have no choice but for now they have suspended new registrations.
More of the same.
The current government appears to have continued where the last government left off as far as higher education is concerned. They were left with a legacy of universities facing insolvency and too many students facing unacceptable financial hardship in a two-tier system that favours the well-off. But, facing up to the dangers is the job of government, not deploying indifference as a game plan. No coherent strategy for sustaining our universities and supporting students emerged in 2024. Time is running out and asking students to pay more was never the solution. A delayed comprehensive spending review is planned for July 2025. Pressure is building for change across the sector but the signs are not good.
The author, Mike Larkin, retired from Queen’s University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics. He remains optimistic and loves mixed metaphors.