The UK’s higher education sector is facing a financial crisis that could have profound implications for students, staff, and the country’s future. Two years ago, university lecturers across the UK took to the picket lines, urgently raising alarms about the state of our universities. Unfortunately, their calls for help were ignored, and the crisis has only deepened. With more than 5,000 job cuts already announced, projections suggest that over 10,000 jobs could be lost this year alone.
Recent modelling from the Office for Students suggests that by 2025-26, nearly three-quarters of English higher education providers could be in deficit. This situation is already evident in institutions like the University of Bedfordshire in my constituency, which has announced plans to cut over two hundred jobs in response to mounting financial pressures.
The rot set in when in 2006, David Cameron raised university tuition fees to cover the full cost of education, particularly for Business, Humanities, and Social Sciences degrees and universities immediately all implemented the maximum permitted fees. However, because these fees did not rise in line with inflation, they soon failed to keep up with the actual cost of higher education.
To bridge the gap, universities increasingly relied on international students, raising their fees, and expanding services to attract more foreign students who, in turn, helped subsidise the cost of domestic students. But the funding model was severely disrupted again by taking the cap off numbers each institution could take, Brexit, rising anti-foreign sentiment within the government, and a crackdown on student visas. This may help explain why, when the Westminster Hall debate on the university funding crisis was held, the only Conservative MP in attendance was the Minister of State, who was obligated to be there.
On 4 November 2024 the Labour Government announced the first university fee increase for undergraduate students in eight years to try and mitigate the funding crisis, but it’s still not enough and no one wants increased tuition fees on a failing funding model.
Even before these ‘reforms,’ the UK had one of the lowest shares of public funding for higher education among OECD countries. A system that primarily relies on student loans to finance education is unsustainable, and the cracks in the funding model are fast becoming chasms.
The cuts in staff and course offerings are a direct result of this unsustainable model. The emergence of job losses across the sector is alarming, with critical administrative and technical roles—the backbone of university operations—often the first to go. This only exacerbates the strain on remaining staff and puts students’ education at risk. A survey conducted in spring 2024 found that 40% of institutions had implemented voluntary redundancies, 30% had reduced the number of courses offered, and 25% had closed entire departments.
One of the most distressing aspects of this crisis is the impact on the arts and humanities. Under successive Conservative Government a false narrative emerged on the value of the arts. But the idea that the arts do not prepare students for the “real world” is simply untrue. The arts produce critical thinkers, skilled communicators, and researchers—attributes essential for a healthy democracy in a rapidly changing world.
Universities are major employers and contribute significantly to the local and national economy. The English higher education sector contributes £95 billion to the UK economy, while our vibrant creative industries generate £125 billion in gross value added each year. For every £1 invested in universities, the return is £14.
The government must act now to fix the funding model and ensure that the higher education sector is protected and adequately funded. We need a sustainable funding model that balances the needs of both home and international students, provides long-term support for research, and values the contributions of staff.
Because universities do not just teach; they shape lives, drive economic growth, and foster positive cultural change. Graduates leave university as skilled professionals who go on to enhance their communities and contribute to society in countless ways. Universities are engines of innovation and enhanced opportunity, and yet, the current state of financial uncertainty threatens to undo all that progress.
The UK’s Higher Education Crisis: A call for action before it is too Late
