Higher education sector in 'existential crisis' as one in four universities make losses

A crisis is facing many universities in England and Northern Ireland as they rack up huge losses.

ITV News understands a quarter are losing hundreds of millions of pounds a year between them - but raising tuition fees is not an option for many

Multiple universities could be forced to close if no action is taken, as one in four in England and Northern Ireland are currently making a loss, ITV News can reveal.

Data seen by ITV News paints a bleak picture of the higher education sector, which experts have described as being in an “existential crisis”.

One-quarter of universities are currently making a loss and total losses over the entire sector sits at a staggering £2 billion, a huge increase from the £200 million from the year before.

Data seen by ITV News shows that losses across the sector have hit £2 billion, a massive increase from the £200 million a year before. Credit: ITV News

Professor Jenny Higham, from Universities UK, the umbrella body which represents 142 universities across the country, told ITV News an urgent solution was needed or the consequences would be severe.

“If [universities] continue not to be able to make up that deficit the end result will be universities will close,” Professor Higham said.

“We need to work with everybody who has a vested interest in universities and their output to come up to solution for this problem.”

The losses are partly because tuition fees have been capped at £9,250 per year – they haven’t risen in line with inflation so they’re worth what would have been £6,000 ten years ago.

A quarter of UK universities are operating at a loss, with experts believing the education sector is staring down an 'existential crisis'. Credit: ITV News

The Russel Group, which is made up of twenty-four universities in the UK, has said it makes a loss of around £2,500 per home student.

The University of East Anglia has returned a deficit in three of the last four years and are now having to make a series of cutbacks to reduce their expenditure.

“We going to have to look at all aspects of income and expenditure at the university, and yes we may be faced with the unsavory prospect of having to look the courses we teach and the subjects that we do research and teaching in,” Professor David Maguire told ITV News.

They are also increasing and have increased the number of foreign students they take on, as the fees they can demand from those coming from abroad are substantially higher than home students.

Students speaking to ITV News said if tuition fees were to rise they would 'drop-out', as they don't 'know what they are paying for'. Credit: ITV News

With the numbers not adding up, something needs to be done to plug the current gap.

All the universities we spoke to said they didn’t want to see tuition fees for home students to go up.

Experts say the solution might be that the government needs to increase funding and grants for universities.

“The situation is not sustainable in the longer term and governments of whatever party don’t want to raise the fee and it’s not thought to be palatable and the government grant, the teaching grant that goes to the university, that is probably the area that you might expect change,” Professor Christopher Millward from Birmingham University told ITV News.

The current trajectory looks incredibly concerning and there’s no doubt some sort of action is needed before there is an unprecedented level of crisis in the sector.

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