Wales needs ‘systemic reform’ as universities lose £100 million

Welsh universities require wholesale change, not just “tinkering”, as combined losses near £100 million and enrolments continue to lag behind the rest of the UK.

Bangor University is the latest institution to post a deficit, with its annual accounts revealing that it was £18.3 million in the red excluding pension movements in 2024-25, which followed a £13.4 million shortfall the year before.

The institution said it faced a very challenging year, with a 7 per cent loss of income from tuition fees. International student intake fell because of changes to the UK’s student visa system, and domestic numbers were also down because of high-tariff universities taking in more.

Bangor is also budgeting for an operating deficit in 2025-26 but said it intends to move back into surplus from the following year.

It follows an underlying operating deficit of £33.4 million at Cardiff University and £39.9 million at Swansea University – both of which had grown considerably from 2023-24.

Collectively, there was a financial shortfall of about £94 million across all eight Welsh universities – compared with £71 million last year.

Ellen Hazelkorn, joint managing partner at BH Associates education consultants and professor emerita at Technological University Dublin, said “tinkering is not a sustainable solution” to the crisis and called for action from the Welsh tertiary regulator, Medr.

Last week Medr published the final report of its subject review commissioned by the Welsh government, which aimed to assess demand for and distribution of provision across the sector amid concerns that universities were responding to the financial crisis by closing courses and creating cold spots.

The report pointed to further concerning trends for universities, highlighting that enrolment has grown 14 per cent in the past 10 years – compared with the overall UK figure of 25 per cent – and that the numbers of students taking courses in certain subject areas have declined significantly over the same period.

Many universities were reliant on enrolments from England because of Wales’ declining youth population.

Areas of concern include modern languages, physical and mathematical sciences, and creative and performing arts, which all declined by more than 20 per cent, and also have weak pipelines coming through at A level, the report found.

Hazelkorn said Medr now needed to “implement its tertiary mandate and adopt a system-level approach to re-establishing institutions with clearer missions and much more collaboration between universities and colleges”.

Educational provision needed to be “better aligned with Welsh, regional and societal needs, international and national labour markets, and changing learner needs and interests,” she added.

There were also small signs of improvement in the accounts. Aberystwyth University, Cardiff Metropolitan University and the University of South Wales (USW) also recorded deficits but they were much smaller than the previous year.

Aberystwyth credited its transformation programme for a slight improvement in the university’s financial situation amid a “rocky period for the sector”.

Cardiff Met’s deficit was mostly attributed to more than £5 million spent on infrastructure and improvements to its estate. And USW said it was performing well despite a challenging competitive economic environment and a reduction in income.

The Welsh government recently committed to raising its cap on university tuition fees in line with English increases because the “period of financial pressure on the sector in Wales is not over”.

But it has also admitted that its more generous system of student support might not be sustainable in the long term.

A Universities Wales spokesperson said: “Universities are operating in increasingly challenging financial circumstances and it’s vital that we invest in and protect our higher education system into the future.

“Our universities are critical to Wales’ future economic and social prosperity. We need an independent review of university funding and student support to ensure that we have a sustainable university sector that can unlock opportunity and growth right across Wales.”

patrick.jack@timeshighereducation.com