Universities facing squeeze in budget surpluses

The English higher education sector’s budget surpluses are set to fall significantly in the financial years 2012-13 and 2013-14 before recovering.

October 25, 2013

According to an assessment of the sector’s financial health by the Higher Education Funding Council for England, universities will be financially “sound overall” until 2015-16 and no institutions are at risk of insolvency.

But its Financial health of the higher education sector: 2012-13 to 2015-16 forecasts report, released today, warns that any further reductions in public funding for capital projects “could risk the quality of the infrastructure” across the academy.

The sector’s operating surplus is forecast to drop to 2.7 per cent in 2012-13, significantly down from 4.2 per cent the year before, the report says.

It will then fall even further to 2 per cent in 2013-14 because of the extra cost of additional staff, before recovering to 3.8 per cent by 2015-16.

“While short-term health is not a concern, some institutions will need to increase surpluses in future years, especially if the increase in public capital funding does not materialise,” it comments.

On average, the sector expects to recruit 3.1 per cent fewer full-time UK and EU undergraduates by 2015-16, compared with 2011-12. 

This figure hides huge variations. Some institutions fear a drop of more than 30 per cent, while six predict growth of more than a fifth.

Despite worries that a tightening up of migration rules could put off overseas students, income from international students is projected to grow by 40 per cent from 2011-12 to £3.9 billion in 2015-16.

Part of this rise is expected because of an anticipated 16.1 rise in international students, although numbers are anticipated to be very slightly down in 2012-13. The rest of the boost in income will be down to higher tuition fees. 

But there is huge variation between institutions over their predictions for overseas student income. Five institutions are expecting it to grow by more than 200 per cent, while others anticipate a reduction of up to a half.

The sector is “becoming increasingly reliant on this source of income” the report notes.

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
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

students use laptops

Researchers say students who use computers score half a grade lower than those who write notes

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