Hefce fears sector finances could be 'poorer than anticipated'

Universities will have a “sound” financial footing in 2014-15 but face risks to their income due to declining demand from home and international students, according to England's funding council.

November 6, 2012

Enrolments for this year are likely to be down, the Higher Education Funding Council for England said yesterday in a publication titled: ‘Financial health of the higher education sector: 2011-12 to 2014-15 forecasts’.

Figures from the Universities and Colleges Admissions Service and institutions “indicates that 2012-13 student demand is lower than forecast by the sector, and that some institutions are recruiting fewer students than expected,” Hefce said in a statement to accompany the report.

“This suggests that enrolments will also be down, and increases the risk that financial performance for these institutions will be poorer than anticipated,” it added.

The report says that based on forecasts submitted to Hefce by institutions in June "at an aggregate level, home and EU undergraduate student numbers are expected to fall by an average of 2.1 per cent".

The revocation in August of London Metropolitan University’s licence to sponsor international students could “adversely affect the reputation of UK higher education, leading to a decline in overseas applications,” Hefce warned.

“It is too early to predict whether this will in fact happen, but fees from overseas students are a significant source of income for many HEIs [higher education institutions], and for the economy more generally, so this is an important issue,” the statement said.

The council anticipated a “sharp”, temporary drop in budget surpluses as universities invest in their facilities and estates.

Surpluses should recover, but some institutions “will need to increase their surpluses beyond current levels in order to finance future capital investment and maintain their long-term sustainability,” Hefce said.

If surpluses do not increase, “there is a risk to the quality of higher education infrastructure, which will harm the long-term sustainability of the sector,” it said.

david.matthews@tsleducation.com

You've reached your article limit.

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments

Featured Jobs

Most Commented

Worried man wiping forehead
Two academics explain how to beat some of the typical anxieties associated with a doctoral degree

Felipe Fernández-Armesto takes issue with a claim that the EU has been playing the sovereignty card in Brexit negotiations

A group of flamingos and a Marabou stork

A right-wing philosopher in Texas tells John Gill how a minority of students can shut down debates and intimidate lecturers – and why he backs Trump

A face made of numbers looks over a university campus

From personalising tuition to performance management, the use of data is increasingly driving how institutions operate

As the country succeeds in attracting even more students from overseas, a mixture of demographics, ‘soft power’ concerns and local politics help explain its policy