Funding shortfall on each UK undergraduate ‘will double to £4K’

Average deficit incurred by English universities for teaching a UK student will more than double to about £4,000 in 2024-25, Russell Group warns

May 5, 2022

Frozen funding combined with rising costs and student demand will see the average deficit incurred by English universities for teaching a UK undergraduate more than double to about £4,000 in 2024-25, meaning a new funding formula is needed, according to the Russell Group.

The group of research-intensive universities sets out the analysis in its response to the Westminster government’s consultation on proposed policy changes, including minimum entry requirements and student number controls, plus the planned lifelong loan entitlement.

In addition to responding on those issues, the Russell Group has opted to highlight the overarching system-wide pressures brought by the government’s recent decision to continue to freeze the tuition fee cap at £9,250 a year until 2024-25, amounting to a freeze of at least seven years in total.

The Russell Group’s analysis estimates that without intervention all subjects will continue to face widening deficits and the average deficit universities would incur for teaching each home undergraduate student would increase from £1,750 in 2021-22 to approximately £4,000 in 2024-25. 

It warns that a continued decline in per-student funding will “start to impact on investment in teaching and ultimately affect quality and choice for students in the long term, potentially impacting on class sizes, staff-student ratios, investment in practical teaching and infrastructure, module choice and intake onto the courses with the largest deficits”.

And that would mean knock-on effects for universities’ support to regional economies, it argues.

Russell Group chief executive Tim Bradshaw said: “We understand the challenges government faces in balancing the public finances so welcome recent investment in high-cost subjects and capital funding. However, with tuition fees frozen for another two years, and costs and student demand rising, the pressure on funding for teaching will grow. 

“Universities will continue to work hard and find ways of reducing that pressure so they can provide the best possible student experience, but if unaddressed over the long term this will inevitably affect the range and quality of courses that can be offered to students at a time when we need a breadth of high-level skills to drive a sustainable recovery. 

“There is an opportunity over the next two years for the sector and government to come together and look at a new funding formula that will protect that pipeline of skills and high-quality education for the benefit of students and the wider UK economy and society.”

Register to continue

Why register?

  • Registration is free and only takes a moment
  • Once registered, you can read 3 articles a month
  • Sign up for our newsletter
Please Login or Register to read this article.

Related articles

Reader's comments (2)

A new funding formula is most definitely required and the opportunity now exists for the Russell Group to take the lead and ensure the new formula is based on facts by faculty and by, ultimately, identifying the unit costs of individual degrees. Currently, no UK University has the data to calculate the cost of delivering individual degrees by subject. Until we have this level of information, it is impossible to identify which courses offer value for money. It is economically criminal not to do this and at the same time pretend that each course costs £9,250 a year to deliver. University economics only makes sense to Mickey Mouse. Until all of HE uses real cost in the real world to make funding decisions the situation will remain inadequate and indefensible. To believe or act on the basis that each undergraduate course costs the same to deliver is as daft as to believe that a Rolls Royce costs as much to make as a Ford Focus or a tin of baked beans costs the same as a plate of fish and chips.
Universities need to seriously cut their bureaucracy and divert that money to paying academics more. There are far too many bureaucrats in English Universities and overpaid senior managers that have zero or even negtive value added - they invent silly rules, comitteees, meetings and paperwork. There is no noeed for a lot of this nonsense which can be better handled by the academics at a much lower cost. Some bureaucrats are necessary bit easily 50% of them could be cut !