Featured on Portsmouth Point, 17th January 2025

University funding has been on a consistent decline since fees were increased to £9,000 in 2012. With the average spend of a university student falling to £9,600 in 2023 compared to that of a spend of almost £12,000 in 2012. Had university fees been correctly adjusted for inflation, they would stand at £15,000 today, reflecting a 40% divergence between the resources required and the funding available to supply them. Not only does this gap place huge pressure on universities but it also forces the industry to make cuts and sacrifices to stay afloat, threatening to compromise the quality of education and increasing their reliance on external sources of income. On top of this, the lack of government assistance to higher education has not improved the situation to say the least. Both primary and early education have received increased funding, in real terms, since 2012, in contrast to the ignorance shown towards universities.

Alongside the funding issues evident over the past decade, the rising rates of inflation and operational costs have left UK universities at the mercy of unforgiving and unsustainable financial pressures. Inflation over the last decade has driven the increases in these crippling operational expenses for the industry. The rise of inflation has meant that, inevitably, resources now cost more. But, perhaps more importantly, it has meant that universities are paying out higher salaries and higher pension payments to their multitude of employees. Not only is the rise in operating costs a problem in the present, it is one which will be seen to continue into the future. With Rachel Reeves announcing a painful increase in employer national insurance contributions set to come into place later this year, the pressure is escalating. By late 2024, over 70 universities had announced redundancies and plans to restructure. The fact is, a mere £250 increase per head is not enough to keep these institutions running, and working, how they should. If the ignorance shown towards the situation in the past continues into this year, there could be significant long-term consequences, both in education and the economy of the United Kingdom. We could see universities forced to consider mergers or closures. Just the closure of one university would deprive many of accessible education and severely injure the local economy surrounding it. Thousands of jobs would be lost, local spending fueled by students would cease to exist and skilled professions would lose valuable potential candidates. Imagine this on a larger scale, with the economy’s of many villages, towns and cities left stranded without the presence of the income injected by the previous universities.

Many students are also facing issues to even attend university. Whilst they face increased debt and costs, the support mechanisms designed to help them remain inadequate. The problems are rooted in the cap on maximum maintenance loans for students. Although set to rise by 3.1% to £10,544 per year, living expenses and extortionate rent payments far outstrip these increases. The accessibility of higher education is on a sharp decline, with accommodation in popular cities such as Bristol, Nottingham and Leeds costing upwards of £7,500 per year. This places students with minimal funds to spend on food, transport and, (potentially most importantly,) partaking in an enjoyable social life. Average student debt for a three-year degree also rises from £49,000 to £51,000 under the new fees, acting as another convincing reason not to attend university. The high cost of education and the resources needed to partake in a university course could easily deter students from disadvantaged backgrounds. Longer debt burdens may discourage applications and risk widening the class and education divide. However, despite costs, graduates typically enjoy significant lifetime earnings benefits compared to non-graduates. Although, with degree apprenticeships and the rise in other alternatives, this could be set to change.

The government must create a sustainable plan to fund and stabilize the sector. The £285 fee increase provides immediate relief but does not address systematic underfunding. The government could consider linking fees to inflation, expanding international student recruitment or providing direct government grants to the industry. Both parliament and the country must be urged to remember the importance of universities in fostering a skilled labor force and driving the UK forwards in line with the developing world. A thriving higher education sector benefits the UK economy and our competitiveness on a global scale.

Chronic underfunding, rising costs and reliance on limited resources have left the sector vulnerable. Both future students and universities are under the significant strain of financial pressures. The government must deliver reforms for a sustainable, and well funded, future for the industry. As a country, we are faced with the urgency of action to safeguard the role which universities play in the UK’s social and economic prosperity.

Portsmouth Point blog offers pupils, staff, parents and OPs a daily platform to share ideas, interests and opinions with the rest of the school community on any subject whatsoever.