University turns to GUS for loan amid ‘significant financial risk’

Lincoln Bishop University faced “significant financial risk” as a result of its large deficit and low cash levels, its accounts show.

The institution, known as Bishop Grosseteste University until last year, recorded a deficit of £6.1 million in its 2024-25 financial statements – compared to a loss of £3.1 million for 2023-24.

Previous analysis found that the deficit of £3.1 million was one of the largest as a percentage of overall income in the whole sector at the time.

After accounting for adjustments to pension schemes the total comprehensive deficit for the year was £6.5 million, a slight improvement on £7.6 million the year before.

The statements say that the university had £4.1 million worth of cash in the bank and in short term deposits at the end of the financial year.

But given that half of the value of tuition fees for 2025-26 from the Student Loans Company will not be received until May 2026, the accounts warned that this balance of £4.1 million was “insufficient to cover the low points during the year”.

“The level of deficit, together with the liquidity position presented a significant financial risk to the university.”

The public provider secured a loan from GAHL Group Finance Limited and formed a “strategic alliance”.

This organisation is a subsidiary of Global University Systems (GUS), which owns Arden University and recently bid £30 million for the University of Buckingham, according to reports.

Lincoln Bishop said the loan was needed to support its in-year cash requirements. It also said the sale of its Wickham Hall student residences helped maintain adequate cash balances.

The accounts showed that the university did manage to increase its student numbers slightly in 2024-25. And applications for 2026 entry are up by 23 per cent, including growth in PGCE and other programmes.

But its expenditure on staff rose to £16.7 million as a result of recruitment to unbudgeted new roles and a Voluntary Leavers Scheme – which cost £800,000.

It said it is planning on bringing staff costs down from 74 per cent of total income through a combination of cost reduction measures and a planned growth in income.

It had a net cash outflow of £3 million from its operating activities in 2024-25.

Despite its financial difficulties, the former Anglican teacher training college has topped the rankings as the UK institution with the most satisfied students for the last two years.

In response, the institution said its partnership with GUS will enhance the student experience by drawing on GUS’s global network and expertise in recruitment and online delivery.

“The agreement includes a loan facility from GUS to support cash flow while cost-reduction measures and new growth initiatives are implemented to allow us to broaden opportunities for learners locally, nationally and internationally.”

patrick.jack@timeshighereducation.com