Category: Financial sustainability

Counting the cost of financial challenges in English higher education

The financial health of UK universities has become a pressing concern, with widespread reports of deficits and shrinking operating surpluses. Yet until now, robust evidence on how these pressures shape institutional decisions – on investment, staffing, research, and student services – has been limited.

To address this evidence gap, interviews were conducted with chief financial officers and directors of finance in 74 of the 133 higher education institutions in England between March and May 2025, covering 56 per cent of institutions.

The study covered all TRAC peer groups, from research-intensive universities to specialist arts and music colleges. The findings reveal stark differences in financial resilience across the sector, but also common themes that underscore systemic vulnerabilities.

A striking 85 per cent of institutions reported either an operating deficit, break-even position, or reduced surplus in the current year. Only 11 institutions – just under 15 per cent – maintained or improved their operating surplus. Even among these, financial pressures were evident, with cost-cutting and efficiency drives mirroring those in deficit institutions.

Low research intensity institutions are most exposed, with 95 per cent in deficit or reduced surplus, while high research intensity universities fare slightly better at 79 per cent. Arts and music colleges also show significant vulnerability, with nearly nine in ten reporting financial strain.

Strategies and trade-offs

The origins of financial weakness vary by institutional type. For research intensive universities, the decline in international tuition fee income is the dominant concern, compounded by visa restrictions and heightened global competition. Medium and low research intensity institutions cite rising staff and estate costs, alongside pension liabilities. For arts and music colleges, the freeze on UK tuition fees was a critical issue, although face additional challenges given the liability of smallness.

These challenges are not short-term blips. An overwhelming 97 per cent of respondents view the current situation as a structural, long-term problem. Many argue that the sector’s business model – heavily reliant on international student income and constrained by capped domestic fees – is fundamentally unsustainable. And more worryingly difficult to change in the short to medium term.

Faced with financial stringency, universities are deploying a mix of defensive and adaptive strategies. Borrowing has been rare – only five per cent of deficit institutions increased debt – but asset sales and diversification of income streams are common. Over three-quarters of institutions are actively seeking new revenue sources, from commercialisation and estate rental to online learning and transnational education partnerships.

Interestingly, financial pressure is not uniformly leading to retrenchment. While some institutions have closed departments or dropped programmes – particularly among medium and less research-intensive universities – many are introducing new courses, both undergraduate and postgraduate, to attract students and generate income.

Staffing, however, tells a more sobering story. Nearly half of deficit institutions have implemented voluntary redundancy schemes, and around one-fifth have resorted to compulsory redundancies. Recruitment freezes are widespread, affecting academic and professional staff alike. These measures, while necessary for financial stability, risk eroding institutional capacity and morale.

Counting the cost

The ripple effects of financial constraint extend beyond staffing. Research support is under significant strain: over a third of institutions report cuts to research facilities and internal consortia. Yet there are pockets of investment – 18 per cent of institutions have increased funding for libraries and data services, and nearly one-fifth have boosted support for industrial collaborations, reflecting a strategic pivot toward partnerships and innovation.

Student experience has, so far, been relatively protected. Most institutions have maintained spending on mental health, wellbeing, and inclusion initiatives, though career development and academic support have seen reductions in about a quarter of cases. Investment in estates is more uneven: while many institutions are deferring maintenance and new builds, over half are increasing spending on digital transformation – a clear signal of shifting priorities.

Financial turbulence is also reshaping leadership dynamics. Nearly 90 per cent of respondents agree that leadership teams are under heightened pressure and scrutiny, with a growing emphasis on short-term decision-making. This environment is taking a toll on staff wellbeing: two-thirds of respondents report negative impacts on mental health, alongside rising workloads and job insecurity. Trust in leadership has declined in almost half of institutions, underscoring the human dimension of the financial crisis.

Perhaps the most sobering finding is the sector’s view of external support. Over 60 per cent of respondents rated government and regional assistance as ineffective. The message is clear: incremental adjustments will not suffice. Respondents called for a fundamental review of the funding model in higher education. Without decisive intervention, the risk is not just institutional hardship but systemic decline – jeopardising the UK’s global standing in higher education and research.

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December 2, 2025
The latest sector-wide financial sustainability assessment from the Office for Students

As the higher education sector in England gets deeper into the metaphorical financial woods, the frequency of OfS updates on the sector’s financial position increases apace.

Today’s financial sustainability bulletin constitutes an update to the regulator’s formal annual assessment of sector financial sustainability published in May 2025. The update takes account of the latest recruitment data and any policy changes that could affect the sector’s financial outlook that would not have been taken into account at the point that providers submitted their financial returns to OfS ahead of the May report.

Recruitment headlines

At sector level, UK and international recruitment trends for autumn 2025 entry have shown growth by 3.1 per cent and 6.3 per cent respectively. But this is still lower than the aggregate sector forecasts of 4.1 per cent and 8.6 per cent, which OfS estimates could result in a total sector wide net loss of £437.8m lower than forecast tuition fee income. “Optimism bias” in financial forecasting might have been dialled back in recent years following stiff warnings from OfS, but these figures suggest it’s still very much a factor.

Growth has also been uneven across the sector, with large research intensive institutions increasing UK undergraduate numbers at a startling 9.9 per cent in 2025 (despite apparently collectively forecasting a modest decline of 1.7 per cent), and pretty much everyone else coming in lower than forecast or taking a hit. Medium-sized institutions win a hat tip for producing the most accurate prediction in UK undergraduate growth – actual growth of 2.3 per cent compared to projected growth of 2.7 per cent.

The picture shifts slightly when it comes to international recruitment, where larger research-intensives have issued 3.3 per cent fewer Confirmations of Acceptance of Studies (CAS) against a forecasted 6.6 per cent increase, largely driven by reduction in visas issued to students from China. Smaller and specialist institutions by contrast seem to have enjoyed growth well beyond forecast. The individual institutional picture will, of course, vary even more – and it’s worth adding that the data is not perfect, as not every student applies through UCAS.

Modelling the impact

OfS has factored in all of the recruitment data it has, and added in new policy announcements, including estimation of the impact of the indexation of undergraduate tuition fees, and increases to employers National Insurance contributions, but not the international levy because nobody knows when that is happening or how it will be calculated. It has then applied its model to providers’ financial outlook.

The headline makes for sombre reading – across all categories of provider OfS is predicting that if no action were taken, the numbers of providers operating in deficit in 2025–26 would rise from 96 to 124, representing on increase from 35 per cent of the sector to 45 per cent.

Contrary to the impression given by UK undergraduate recruitment headlines, the negative impact isn’t concentrated in any one part of the sector. OfS modelling suggests that ten larger research-intensive institutions could tip into deficit in 2025–26, up from five that were already forecasting themselves to be in that position. The only category of provider where OfS estimates indicate fewer providers in deficit than forecast is large teaching-intensives.

The 30 days net liquidity is the number you need to keep an eye on because running out of cash would be much more of a problem than running a deficit for institutional survival. OfS modelling suggests that the numbers reporting net liquidity of under 30 days could rise from 41 to 45 in 2025–26, with overall numbers concentrated in the smaller and specialist/specialist creative groups.

What it all means

Before everyone presses the panic button, it’s really important to be aware, as OfS points out, that providers will be well aware of their own recruitment data and the impact on their bottom line, and will have taken what action they can to reduce in-year costs, though nobody should underestimate the ongoing toll those actions will have taken on staff and students.

Longer term, as always, the outlook appears sunnier, but that’s based on some ongoing optimism in financial forecasting. If, as seems to keep happening, some of that optimism turns out to be misplaced, then the financial struggles of the sector are far from over.

Against this backdrop, the question remains less about who might collapse in a heap and more about how to manage longer term strategic change to adapt providers’ business models to the environment that higher education providers are operating in. Though government has announced that it wants providers to coordinate, specialise and collaborate, while the sector continues to battle heavy financial weather those aspirations will be difficult to realise, however desirable they might be in principle.

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November 20, 2025
Advance HE must deepen our expertise in supporting transformation and change

The challenges for higher education and research institutions – both in the UK and in many countries across the world – are acute and immediate.

A combination of funding pressures, changing student demands, the rapid development of AI, international conflict and restrictive visa regimes are necessitating significant change and transformation.

These tough challenges require all those working in higher education to think differently about how we lead, teach, support students and operate. Yet within these challenges lie opportunities for innovation and positive change.

I am three months into the role as chief executive of Advance HE. My recent conversations with many of our members have reinforced the need for us to focus on how we can enhance our support for transformation and change.

Time for a change

I believe that to be successful, higher education institutions need good leadership; effective governance; they should promote excellence in teaching and learning; and embed equality, promote diversity and inclusion. These are the four key pillars of Advance HE’s work and will continue to be so. However, we cannot stand still. Supporting higher education institutions in this difficult and changing context means that Advance HE needs to change and modernise. Our portfolio, programmes and products need regular review, refreshing and revamping, to remain relevant, to be high value and high impact.

There has been excellent work led by Universities UK’s transformation and efficiency taskforce, which set out a number of recommendations and challenges for the sector. Advance HE can play an important role in supporting transformation and change both at a sector level and an institutional level. In the context of financial pressures, changing student needs, international uncertainty and digital developments – we need to be an enhancement agency – a trusted partner for higher education and research institutions.

Supporting enhancement, change and transformation will now be at the heart of what Advance HE does – embedded across our member benefits, our programmes and our consultancy. To help institutions through these challenging times we will apply our expertise, experience and resources to best support enhancement and service improvement, where it is needed.

Collaborating with partner organisations that are supporting transformation and change will be central to our approach. Blending our expertise in leadership development, educational excellence, equality and inclusion, governance effectiveness with the experience of partners that have different but complementary skills and capabilities.

Overall, our focus is primarily on people. We can play a role to enhance capabilities at all levels to lead and manage transformation and change – academics, professionals services, governing bodies.

What we will do

There are three practical steps I am taking now to strengthen our support for transformation and change:

Firstly, we have made supporting transformation and change a core part of our membership offer. We are drawing on the areas where we have deep expertise – leadership development, educational excellence, governance effectiveness – to apply our expertise directly to the most pressing issues facing our members.

For example, the new Educational Excellence Change Academy, a structured virtual six-month programme designed to help higher education staff to lead systemic educational transformation. The programme provides practical support to redesign curriculum to align with workforce needs, reimagine pedagogy to be inclusive, digital, and engaging; and enhancing student support models to strengthen wellbeing and retention.

Additionally, we have launched the Merger Insights and Roadmap, a new resource for navigating institutional collaboration, partnerships and mergers. Drawing on recent case-studies from successful transformations, it considers early option-testing and due diligence through to culture integration and regulatory engagement.

Secondly, later this autumn I will announce a new strategic advisory group who will work with our in-house expert to further enhance our support for transformation and change. We will further evolve our membership offer; review our portfolio of products and services; lead new research to share insights; and bring knowledge and learning from other sectors that have delivered significant transformation. We will also recruit new associates with deep and relevant transformation experience to work with our in-house experts.

Thirdly, we will do more to realise the benefits of Advance HE being a global organisation with an international membership. Our 470 members are from 34 countries – with almost a third of our members outside the UK – in Australia, Ireland, in the Gulf, across Europe, in South-East Asia and beyond. The challenges facing higher education institutions in one part of the world are often mirrored in another. The solutions, approaches and innovations being developed in different contexts can offer fresh perspectives and practical ideas that translate across borders. We will do more to draw on the fact that we have a diverse, global membership to share insights, solutions, and good practice across our membership.

At a time of significant challenge for higher education and research, institutions are increasingly needing to deliver transformational change in the way they operate. Advance HE is committed to supporting people working in higher education to do this successfully.

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October 30, 2025
The higher education sector needs an honest broker to support structural change

Of all the current headwinds faced by the higher education sector, one of the most challenging is a lack of expertise and experience in the area of structural change.

In an environment where radical collaboration and merger are increasingly seen – rightly or wrongly – as a solution to the sector’s financial challenges, the expertise needed to broker and execute a successful merger or other collaboration seems to be patchy.

As, arguably, are the somewhat different competences required to steward the longer term strategic integration of two or more distinct institutions, each with their own teaching and research portfolios and cultures. The answer to the question “who has done this before?” can only be answered in the affirmative by a handful of people.

This issue was acknowledged in Mills & Reeve’s joint report with Wonkhe Connect More with the following insight from a one of the heads of institution we interviewed:

We all have a skills matrix for boards and for courts and for councils. I think, increasingly, that needs to reflect people who’ve got some expertise and some background in this space…I don’t think there are many vice chancellors who would necessarily have the skills, the knowledge, and the background. Really, this is new territory, potentially, for us, it’s new turf.

Of course, it wasn’t always thus. One of the ironies of the current dearth of experience is that large numbers of providers are themselves the product of historic mergers and collaborations. Taking the long view, the history of many providers is a complex genealogy, a narrative of mergers past and more recent.

In part, the steady decline in institutional experience of these things was the natural result of a relatively benign financial environment. It’s easy to forget in the current climate but the period of low inflation and cheap borrowing meant that, at an institutional level, there was little impetus to challenge the operating model and, of course, the introduction of a marketised funding model meant that competition, rather than collaboration, was very much the order of the day.

That marketised model was also accompanied by a marked shift in approach from the regulator. While HEFCE adopted a relatively low-key approach to mergers and collaboration – generally leaving the impetus to come together to institutions themselves – it did publish guidance on mergers and had a collaboration and restructuring fund to assist institutions to explore and implement structural change.

Crucially, HEFCE was widely accepted to be a neutral broker who would help facilitate institutions coming together – and it had the funding to help smooth the path. By contrast, OfS, in its response to a question from the House of Lords Industry and Regulators Committee, made it clear that it does not consider itself to have “the remit, powers or funding to intervene to prevent closure or to facilitate mergers or acquisitions.”

Skills gap

Where, then, does that leave providers? Typically, there is a reliance on the institution’s executive team, in particular, the vice chancellor, to steer the merger. But most higher education executives are not from the business world with experience in mergers and to a significant degree they have a conflict of interest. There is also a need to continue with their day jobs and manage business as usual in case the merger doesn’t happen.

The next most obvious port of call is to look for expertise among their own governing bodies, and, specifically, their external members. After all, one of the main motivations of having lay external members is to draw upon their expertise and to fill gaps which (understandably enough) exist within the skill sets of senior management teams and the institution more widely.

The problem, however, is that merger and radical collaboration require a very particular set of skills. It’s very easy for universities to get starry-eyed about a governor just because they happen to be an investment banker, an accountant, or have experience of public sector mergers in the NHS, for example. But the skills required in a university merger or a complex debt restructuring are very specific and even a governing body which is well-stocked with members from across different professional services and backgrounds cannot assume that its trustees have the requisite expertise to drive forward a merger of two institutions.

Of course, an institution can buy in a certain level of expertise. But what perhaps can’t always be replicated by professional advice are the experience and war stories of those who have lived and breathed mergers and collaborations from the inside – particularly from the education and adjacent sectors. In Mills & Reeve’s joint report with KPMG UK – Radical collaboration: a playbook – we drew out some of those lived experiences in the form of case studies. However, written case studies need to be seasoned with real-life personal experience. What is really needed when scoping a potential merger or other kind of radical collaboration is access to a “hive mind” of critical friends.

An HE Commissioner model

Other sectors have taken a strategic approach to developing this expertise. The Further Education Commissioner is the most obvious parallel. Between 2015 and 2019 the FE sector saw 57 mergers, three federations, three joint FE and HE institutions and 23 academy conversions. If most of UK higher education no longer has institutional memory of mergers, FE has it in bucket loads.

The FE Commissioner and their team offer a range of services to FE colleges – ranging from informal chats and financial health checks, through to more formal invention assessments. Their team – a mix of former leaders and finance professionals from within the sector – have genuinely seen and done it all before. Higher education deserves the same deep pool of knowledge to draw on, especially if the worst case scenario of institutional insolvency and/or disorderly market exit is to be avoided.

For this to work successfully in HE there would need to be some level of funding and a decision as to whether a commissioner’s role might sit within DfE or OfS. Our sense – particularly given the size and complexity of universities and the involvement of key stakeholders such as banks and private placement bondholders – is that there will still be a large role played by private sector consultants, lawyers, and accountants. However, there is room for a more collegiate level of engagement from DfE and OfS than arguably exists at present.

As well as pooling expertise on how to collaborate, placing an HE commissioner role on a formal footing might also allow it to broker conversations between providers seeking to work together more closely – something which, in our experience, is done very hesitantly at present, both because of the fear of breaching competition rules and, more generally, because every potential collaboration partner is, in a very real sense, also a competitor.

What can’t be underestimated is how urgently this function is needed. Providers are capable of doing this alone, as recent examples such as the Anglia Ruskin/Writtle and St George’s/City mergers testify. However, how much better for the long-term future of the sector it would surely be if providers had ready access to some critical friends and some “protected” spaces to have conversations about how best to achieve and implement forms of radical collaboration.

This article is published in association with Mills & Reeve.

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October 14, 2025
Higher education mergers are a marathon not a sprint

When the announcement came last Wednesday that the universities of Kent and Greenwich are planning to merge, the two institutions did a fine job of anticipating all the obvious questions.

In particular, announcing that the totemic decision has already been taken on who should lead the new institution – University of Greenwich vice chancellor Jane Harrington – was a pragmatic move that will save a great deal of gossip and speculation that could otherwise have derailed the discussions that will now commence on how to turn “intention to formally collaborate” to the “first-of-its-kind multi university group.”

But even with that really tricky bit of business out of the way, there is still a lot to work through. Broadly those questions fall into two baskets: the strategic direction and the practical fine detail. Practicalities are important for giving reassurance that people’s lives aren’t about to radically change overnight; albeit there are inevitably lots of issues that are either formally unknown at this stage or which can only be tackled in light of the evolution of the final agreement and organisational structure.

With that in mind, it is really worth emphasising that the notion of a “multi university group” is a brand new idea, given a conceptual shape in the very recent publication Radical collaboration: a playbook from KPMG and Mills & Reeve, produced under the auspices of the Universities UK transformation and efficiency taskforce. The idea of a “multi university trust” explored in that report, derived from the school sector, posits the creation of a single legal entity that can nevertheless “house” a range of distinct “trading entities” with unique “brands” each with an agreed level of local autonomy.

It answers the question of how you take two (or more) institutions, each with their own histories and characteristics and find ways to create the strength and resilience that scale might offer, while retaining the local distinctive characteristics that staff, students, and local communities value and feel a sense of affinity to. It also, as has been noted in the coverage following the announcement, leaves an option open for other institutions to join the new structure, if there’s a case for them to do so.

“It is very positive to see institutions taking proactive steps to finding new ways to work together,” says Sam Sanders, head of education, skills and productivity for KPMG in the UK. “The group structure proposed is a model we have seen be successful elsewhere, where brand identity is retained but you get economies of scale, meaning institutions can focus on their core activities while sharing the burden of the overheads. If it goes well it could act as a blueprint for other similar ventures.”

Sam’s reflection is that establishing a new entity might be the most straightforward part of the process: “The complicated part is moving to a new model that simultaneously preserves the right culture in the right places while achieving the savings you might want to see in areas like IT, infrastructure, and estates. These are multi-year agendas so everyone involved needs to be prepared for that.”

The long and winding road

With lots to work through, it’s really important to step back, and give space to the institutions to work this out. Because the big picture is about mapping what that critical path looks like from single-institution vulnerabilities to strength in numbers – and that is a path that these institutions and their governing bodies are, to a large extent, carving out as they go, potentially doing the wider sector a service in the process as others may look to follow the same path in the future.

“The sector response has been overwhelmingly positive,” says Jane Harrington, who is already fielding calls from heads of institution who are curious about the planned new model. Both Jane and University of Kent acting vice chancellor Georgina Randsley de Moura have experience with group structures in schools and further education, knowledge they drew on in thinking through the options for formal collaboration – starting with ten different possible models which were narrowed down to two that were explored in more depth.

“We started with what we wanted to achieve, and then we looked for models,” says Georgina. “We kept going back to our principles: widening participation, education without boundaries, high quality teaching and research, and what will make sense for our regions. Inevitably there is some focus in the news around finances and that is an important part of the context, but this would not work if our universities didn’t have values and mission alignment.”

“We also had examples in mind of where we don’t want to end up,” adds Jane. “You see mergers where the brand identity is lost and it takes a decade to get it back. We have, right now, two student-facing brands that are strong in their own right. And in five or ten years time it might be that we have four or five institutions that are part of this structure – we don’t think it would make sense for them to become part of one amorphous brand.”

It’s frequently observed that bringing together two or more institutions that are facing difficult financial headwinds may simply create a larger institution with correspondingly larger challenges. So having a very clear sense strategically of where the strengths and opportunities lie, as well as the where risks and weaknesses might also be subject to force-multiplier effects, is pretty important at the outset.

It’s clear that there is an efficiency agenda in play in the sense that merging allows for the adoption of a single set of systems and processes – an area where Jane is especially interested in curating creative thinking. But the wider opportunities afforded by scale are also compelling, especially in being more strategic about the collective skills and innovation offer to the region.

Kent and Medway local councils and MPs have also responded enthusiastically to the universities’ proposal, the two heads of institution tell me – not least because navigating politics around different HE providers can be a headache for regional actors who want to engage higher education institutions in key regional agendas.

“There are cold spots in our region where nobody is offering what is needed,” says Jane. “But developing new provision is much harder when you are acting alone. This region has pockets of multiple forms of deprivation: rural, urban and coastal. The capacity and scale afforded by combining means we can think strategically about how to do the regional growth work, and what our combined offer should be, including to support reskilling and upskilling.”

Georgina makes a similar case for combining research strengths. “Our shared research areas, like health, food sustainability, and creative industries, play to regional strengths,” she says. “When research resources are constrained, by combining we can do more.”

We can work it out

The multi university group is not, in theory, a million miles from a federation in structure in that in federations generally there is a degree of autonomy ceded by the constituent elements to a single governing body – but in a federation each entity retains its individual legal status. A critical difference is the extent to which a sharing economy among the entities would have to be painstakingly negotiated for a federation, which could erode the value that is created in collaborating. It could also raise tricky questions around things like VAT.

But the sheer novelty of the multi university group also raises a bunch of regulatory questions, covered in all the depth you’d expect by DK elsewhere on the site – to give a flavour, can you use the word “university” for your trading entity without that existing as a legal entity with its own degree awarding powers?

The supportive noises from DfE and OfS at the time of the initial announcement should give Kent and Greenwich some degree of comfort as they work through some of these questions. The sector has been making the argument for some time now that if the government and regulator want to see institutions seizing the initiative on innovative forms of collaboration, there will need to be some legal and regulatory quarter given, up to and including making active provision for forms of collaboration that emerge without a legal playbook.

Aside from the formal conditions for collaboration, how OfS conducts itself in this period will be watched closely by others considering similar moves. While nobody would suggest that changing structure offers an excuse for dropping the ball on quality or student experience – and both heads of institution are very clear there is no expectation of that happening – OfS now has a choice. It can choose to be highly activist in requesting reams of documentation and evidence in response to events as they unfold, from institutions already grappling with a highly complex landscape. Or it can work out an approach that offers a degree of advance clarity to the institutions what their accountabilities are in this time of transition, and how they can/should keep the regulator informed of any material risks arising to students from the process.

Despite the generally positive response, there is no shortage of scepticism about whether a plan like the one proposed can work. The answer, of course, depends on what you think success looks like. Certainly, anyone expecting a sudden and material shrinkage in costs is bound to be disappointed. Decisions will be made along the way with which some disagree, perhaps profoundly.

But I think what is often forgotten in these discussions is that the alternative to the decision to pursue a new structure is not to carry on in broadly the same way as before, but to pursue a different but equally radical and equally contentious course of action. If the status quo was satisfactory then there would be no case for the change. In that sense, being as useful as possible in helping these two institutions make the very best fist that they can of their new venture is the right thing for everyone to do, from government downwards.

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September 15, 2025
What works for supporting student access and success when there’s no money?

In 2021 AdvanceHE published our literature review which set out to demonstrate significant impact in access, retention, attainment and progression from 2016–21.

Our aim was to help institutional decision making and improve student success outcomes. This literature has helped to develop intervention strategies in Access and Participation Plans. But the HE world has changed since review and publication.

Recent sector data for England showed that 43 per cent of higher education providers sampled by the Office for Students (OfS) were forecasting a deficit for 2024–25 and concluded that:

Many institutions have ongoing cost reduction programmes to help underpin their financial sustainability. Some are reducing the number of courses they offer, while others are selling assets that are no longer needed.

All the while, institutions are, quite rightly, under pressure to maintain and enhance student success.

The findings of our 2021 review represent a time, not so long ago, when interventions could be designed and tested without the theorising and evaluation now prescribed by OfS. We presented a suite of options to encourage innovation and experimentation. Decision making now feels somewhat different. Many institutions will be asking “what works now, as we find ourselves in a period of financial challenge and uncertainty?”

Mattering still matters

The overarching theme of “mattering” (France and Finney 2009, among others) was apparent in the interventions we analysed in the 2021 review. At its simplest, this is interventions or approaches which demonstrate to students that their university cares about them; that they matter. This can be manifest in the interactions they have with staff, with systems and processes, with each other; with the approaches to teaching that are adopted; with the messages (implicit and explicit) that the institution communicates.

Arguably, a core aspect of mattering is “free” in terms of hard cash – us showing students that we care about them, their experience, and their progress, for staff to have a friendly approach, a regular check in, and meaningful and genuine dialogue with students. Such interactions may well carry an emotional cost however, and how staff are feeling – whether they feel that they matter to the institution – could impact on morale and potentially make this more difficult. We should also be mindful of the gendered labour that can be evident when teaching academics are encouraged to pick up more “pastoral” care of students; in research-intensive institutions, this may be more apparent when a greater proportion of female staff are employed on teaching focused contracts.

In our original review we found that there were clear relationships between each student outcome area – access, retention, attainment and progression – and some interventions had impact on more than one outcome. Here are five of our examples, within the overarching theme of mattering, which remind the sector of this impact evidence whilst illustrating developments in thinking and implementation.

Five impactful practices

Interventions which provide financial aid or assistance to students pre and post entry were evidenced as impactful in the 2016-2021 literature. We remember the necessity of providing financial aid for students during Covid, with the government even providing additional funding for students in need. In the current financial climate, the provision of extra funding may feel like a dream for many institutions. Cost reduction pressures may mean that reducing sizable student support budgets are an easy short-term win to balance the books.

In fact late last year, Jim Dickinson predicted just this as the first wave APPs referenced a likely decline in financial support. As evaluative data has shown, hardship funding is used by students to fund the cost of living. When money is tight, an alternative approach is to apply targeted aid where there is evidence of known disadvantage. Historically the sector has not been great at targeting, but it has become a necessity. Preventing student withdrawal has never been more important.

We also noted that early interventions delivered pre-entry and during transition and induction were particularly effective. The sector has positioned early and foundational experiences of students as crucial for many years. When discussions about cost effectiveness look to models of student support, targeting investment in the early years of study, rather than universally applied, could have the highest impact. Continuation metrics (year one to year two retention) again drive this thinking, with discrete interventions being the simplest to evaluate but perhaps the most costly to resource. Billy Wong’s new evidence exploring an online transition module and associated continuation impact is a pertinent example of upfront design costs (creation), low delivery costs (online), and good impact (continuation).

Another potentially low cost intervention is the design of early “low stakes” assessment opportunities that give students the chance to have early successes and early helpful feedback which, if well designed, can support students feeling that they matter. These types of assessments can support student resilience and increase the likelihood of them continuing their studies, as well as providing the institution with timely learner analytics regarding who may be in need of extra support (a key flag for potential at-risk students being non-completion of assessments). This itself is a cost saving measure as it enables the prioritisation of intervention and resource where the need is likely to be greatest.

Pedagogically driven interventions were shown in our review to have an impact across student outcome areas. This included the purposeful design of the student’s curriculum to impact on student learning, attainment, and future progression. Many institutions are embarking on large scale curriculum change with an efficiency (and student experience/outcomes) lens. Thinking long term enough to avoid future change, yet attending to short term needs is a constant battle, as is retaining conversations of values and pedagogy.

How we teach is perhaps one of the most powerful and “cost-free” mechanisms available, given many students may prioritise what time they can spend on campus towards attending taught sessions. An extremely common concern expressed by new (and not so new) lecturers and GTAs when encouraged to interact with students in their teaching is “But what if I get asked a question that I don’t know the answer to?” Without development and support, this fear (along with an understandable assumption that their role is to “transmit” knowledge) often results in a retreat to didactic, content heavy approaches, a safe space for the expert in the room.

But participative sessions that embed inclusive teaching, relational and compassionate pedagogies, that create a sense of community in the classroom where contributions are valued and encouraged, where students get to know each other and us – all such approaches can show students that they matter and support their experience and their success.

We also found that interventions which provided personal support and guidance for students impacted positively on student outcomes. One to one support can be impactful but costly. Adaptations in delivery or approach, for example, small group rather than individual sessions and models of peer support are worth exploring in a resource sensitive environment. Embedding personal and academic support within course delivery and operating an effective referral system for students when needed, is another way to get the most out of existing resources.

Finally, the effective use of learner analytics was a common theme in our review of impact. Certainly, the proactive use of data to support the identification of student need/risk makes good moral and financial sense. However, large scale investment might be necessary to realise longer term financial gains. This might be an extension of existing infrastructure or as Peck, McCarthy and Shaw recently suggested, HE institutions might turn to AI to play a major role in recognising students who are vulnerable or in distress.

Confronting the hidden costs

These financial dilemmas may feel uncomfortable; someone ultimately gains less (loses out?) in a targeted approach to enhancing student success. Equality of opportunity and outcome gaps alongside financial transparency should be at the forefront of difficult decisions (use equality legislation on positive action to underpin targeting decisions as needed). Evaluation, and learning from the findings, become even more important in the context of scarce resources. While quick decisions to realise financial savings may seem attractive, a critical eye on the what works evidence base is essential to have long term impact.

Beyond our AHE review, TASO has a useful evidence toolkit which notes cost alongside assumed impact and the strength of the evidence. As an example, the provision of information, advice and guidance and work experience are cited as low cost (one star), with high-ish impact (two stars). This evidence base only references specific evidence types (namely causal/type three evidence). The series of evidence-based frameworks (such as Student Success, Employability, Inclusive Practice) from AdvanceHE are alternative reference points.

The caveat to all of the above is that new approaches carry a staff development cost. In fact, all of the “low cost” interventions and approaches cited need investment in the development and support of academic staff. We are often supported by brilliant teams of learning designers and educational developers, but they cannot do all this heavy lifting on their own given the scale of the task ahead. As significant challenges like AI ask us to fundamentally rethink our purpose as educators in higher education, perhaps staff development is what we should be investing in now more than ever?

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August 13, 2025
Civic engagement offers a firm foundation for universities contributing to regional economic growth agendas

When searching for friendly support or warm words from politicians, the media, and the public, UK universities are increasingly being left empty-handed.

Last year’s modest increase in tuition fees allowed universities a temporary reprieve after years of tightening financial constraints but came with a firm warning that standards must improve and was quickly wiped out by rises in National Insurance. Meanwhile, culture wars and negative perceptions on quality and graduate outcomes continue to dominate discourse around the sector, fuelling criticism of universities from all directions.

Richard Jones, vice president for regional innovation and civic engagement at the University of Manchester posited last week that university leaders may be tempted to look for easy savings in their civic impact work – initiatives that engage with and benefit their local community but ultimately fall outside of a university’s traditional mission of teaching and research. But as he argues, this would be a profound mistake.

The outlook in recent years for universities may have been challenging, but hope lies in Labour’s focus on place-based policy. Place has driven flagship funding decisions and policies including the Spending Review and the Industrial Strategy, with more money being devolved from Whitehall to the regions in pursuit of growth. New Mayoral Strategic Authorities have been empowered to take the reins on transport, investment, spatial planning and skills, with the promise of further autonomy as they mature. A new Green Book – government’s methodology for assessing public investments – is being updated and will broaden the criteria to look more favourably at investments outside London and the South East.

Universities are perfectly placed to be the drivers of Labour’s regional growth ambitions. The priority sectors in last week’s Industrial Strategy – including advanced manufacturing, life sciences, and clean energy industries – are some of UK universities’ best strengths. Moreover, as anchor institutions located in the heart of communities, universities are physically well-placed to address causes of economic decline.

Civic engagement for economic growth

The civic university movement, which champions collaboration between universities and their localities, has an established framework for institutions looking to ramp up civic impact initiatives with their civic university agreements. More than 70 civic university agreements are already in place between universities and their local authorities, with universities in Manchester, Nottingham, Sheffield, Exeter, Derby and London, among others, providing a range of examples for institutions to learn from.

A UPP Foundation series of roundtables held in four regions across England recently has also highlighted that the civic university movement remains active, with a wealth of civic activity taking place across the country. Universities are finding creative ways to engage with their local communities, with examples including offering to host events in university spaces, or running a café that demystifies the benefits of nuclear energy while providing employment and training for local people. For institutions nervous about signing up to lengthy and potentially costly partnerships, participants at the roundtables instead stressed that smaller gestures can be just as meaningful. Rather than draining resources, civic activity can in fact alleviate funding pressures when universities work together to learn from one another.

Irrespective of geography, participants were united in their contention that universities should collaborate with their local partners to develop civic initiatives, working collaboratively to address the real day-to-day problems communities want help with, such as helping local businesses transition to net zero.

Labour’s devolution agenda also offers an opportunity for universities to become visible bridges working across regions and political geographies. While mayoral devolution has been lauded in cohesive urban centres like Manchester and Birmingham, there are concerns the model will work less well in rural areas where proposed Mayoral Combined Authorities will intersect with traditional county borders. For such regions, universities can both serve as bolsters to wider regional identity and can benefit from the flexibility of their own geography that may span mayoral regions.

The opportunities are there for universities to re-embed civic activity into their core work under Labour’s agenda – but it needs brave leadership to embrace them. In the face of tough financial decisions, university leaders must champion the benefits of civic activity. The late Bob Kerslake, chair of the UPP Foundation’s Civic University Commission 2018–19, deeply understood the potential and necessity for universities to be rooted in their local communities. For a higher education sector that has spent recent years on uncertain footing, tapping into Kerslake’s vision could provide a more certain path forward.

The UPP Foundation’s full report UPP Foundation Spring 2025 Roundtables: The Role of Universities in Regional Placemaking explores the key themes of the roundtable discussions. You can download the report here.

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July 2, 2025
What we’ll be talking about at The Festival of Higher Education 2025

We’re not going to lie, we had to think really hard about what we want this year’s Festival of Higher Education to be about.

If you’ve been to the event – returning to the University of London’s iconic Senate House this November – you’ll know by now to expect thoughtful analysis, discussion of the biggest issues facing higher education, and to hear from some key people who are leading and influencing the policy and political landscape. You can also expect to connect with people outside your professional area of work, find out about something new, drink buckets of coffee, and enjoy a jolly good party, if that’s your thing.

None of that’s changing, obviously. Our reflections have been much more about the journey the HE sector has been on in the last year, and the potentially tough road ahead. The Westminster government has promised a package of higher education reform, possibly pegged to an annual inflationary uplift in undergraduate tuition fees, but there will most likely be no major injection of public funds. The straws in the wind from the last few years suggest that the steady trend in recruitment towards growth in home and international students is ebbing.

When will there be good news?

That means that across the UK higher education institutions are having to think hard, perhaps harder than they ever have before, about their core purpose and mission, about securing quality and excellence in education, continuing cutting edge research and scholarship, and deepening their compacts with their communities and regions to make the value of that education and research real to people.

There is both potential and pain in that journey. If the HE sector was going to transform it would rather not be doing it under these circumstances. But with the right ideas and energy higher education should be able not just to cling on but to thrive – with a renewed sense of purpose and new ways of achieving the core mission for the generations to come.

We think that potential can better be achieved through connection – with external perspectives, with the articulation of shared challenges, and with people and ideas who might be able to help. And that’s what we will be focused on as we develop the agenda for this year’s Festival of Higher Education. We can guarantee that this year’s agenda will be packed full of fresh ideas, innovation and inspiration!

The Festival should offer the chance to hear from voices outside the sector who can speak to the wider public policy imperatives and global trends that UK higher education will need to think through. It should create space for deep reflection and new perspectives on the organisational challenges higher education is grappling with. And it should open up new thinking about the connections and relationships inside institutions and how to sustain and enhance academic community during times of change.

Thematic, systematic

Making that concrete, we think there are several really key policy themes that need to be unpacked.

Economic growth and regional/national development – the number one priority of not just the Westminster government but arguably of all governments. Higher education is one of the most important tools available in efforts to create flourishing economic ecosystems but we need a stronger articulation of the role of higher education in developing skilled graduates, how institutions connect up in their regions and nationally, and how the innovation grown in universities is seeded in the wider economy.

The regulatory environment and the relationship between the state and higher education institutions – with a new chair at the Office for Students, Medr implementing a new regulatory framework in Wales and reorganisation of FE/HE sector agencies in Scotland there are wide open questions about how best to find the balance between public accountability for quality, access and governance, and institutional freedom to innovate and offer something distinctive and sustainable – including deciding what not to do.

The future student learning experience – as labour market opportunities for graduates evolve in response to AI, costs of study put increasing pressure on the traditional HE route and on students’ wellbeing, and governments consider how to upskill and reskill to increase opportunity throughout individuals’ lives, higher education institutions will need to think about the kind of educational and personal development experiences future students will need to help them build the lives they want.

Organisational effectiveness of higher education institutions – it doesn’t sound that inspiring when you put it that way, but looking at challenges around effective governance and leadership for the current moment, the drive for efficiency and better use of data to inform decisions, and most importantly how higher education professionals experience their working environment, and are meaningfully engaged in change agendas, you realise just how important a theme this is. Evolution and adaptation might not be enough for many institutions – leadership teams and governing bodies will need to equip themselves to drive transformational change.

Higher education in an increasingly uncertain world – while the Trump administration attacks US universities the shockwaves are being felt in the UK and beyond. The ongoing war between Russia and Ukraine; the growing risk of conflict between China and Taiwan; conflict in Gaza and wider Middle East tensions all have an impact on campuses in the UK. How can UK universities chart a path through this global turmoil?

We’re certainly not claiming that a single event will answer all these challenges in their entirety. But we think these are the issues that are driving higher education change – and for that change to be experienced as renewal rather than decline, there’s still plenty of value in taking the time to talk and think about them outside your normal day to day.

We remain immensely hopeful about the future for UK higher education – and we promise to create an event that you can sign up to now, confident that we’ll be working to build two days of insight, inspiration and fun that will be a highlight of your year. Join us – you won’t be disappointed.

Reduced rate early bird tickets for the Festival of Higher Education are available until Friday 20 June and thereafter at the normal rate – click here for more information and to buy your ticket.

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June 2, 2025
OfS continues to sound the alarm on the financial sustainability of English higher education

For the third year in a row, the English higher education sector’s collective financial performance is in decline.

That is the conclusion of the latest annual assessment of the sector’s financial sustainability from the Office for Students (OfS), based on finance returns for 2023-24.

Overall, after stiff warnings this time last year about the risks of system-wide provider deficits if projected student number growth failed to materialise, OfS says that many providers are taking steps to manage their finances, by reducing costs and downgrading recruitment growth projections. It remains unlikely, says OfS, that a large provider will become insolvent in the coming financial year.

But 43 per cent of providers are forecasting a deficit for the current financial year 2024–25, and there is an overall decline in overall surplus and liquidity – albeit with the expectation of growth in the years ahead. While larger teaching-intensive and medium sized providers were more likely to report a deficit, there is also quite a lot of variation between providers in different groups – meaning that institution type is not a reliable guide to financial circumstances.

Recruitment woes

Student recruitment is the most material driver of financial pressure, specifically, a home and international student market that appears insufficient to fill the number of places institutions aspire to offer. The broad trend of institutions forecasting student number growth in hopes of offsetting rising costs – including national insurance and pension contributions – makes it unlikely that all will achieve their ambitions. There’s evidence that the sector has scaled back its expectations, with aggregate forecast growth until 2027–28 lower than previous forecasts. But OfS warns that the aggregate estimate of an increase of 26 per cent in UK entrants and 19.5 per cent in non-UK entrants between 2023–24 and 2027–28 remains too optimistic.

Questioned further on this phenomenon, OfS Director of Regulation Philippa Pickford noted that there is significant variation in forecasts between different providers, and that given the wider volatility in student recruitment it can be really quite difficult to project future numbers. The important thing, she stressed, is that providers plan for a range of possible scenarios, and have a mitigation plan in place if projections are not achieved. She added that OfS is considering whether it might give more information to providers upfront about the range of scenarios it expects to see evidence of having been considered.

Storing up trouble

While the focus of the financial sustainability is always going to be on the institutional failure scenario, arguably an equally significant concern is the accumulation of underlying structural weaknesses caused by year-on-year financial pressures. OfS identifies risks around deferral of estates maintenance, suspension of planned physical or digital infrastructure investments, and a significant increase in subcontractual (franchising) arrangements that require robust governance.

All this is manifesting in some low-key emergency finance measures such as relying on lending to support operating cashflow where there is low liquidity at points in the year, selling assets, renegotiation of terms of covenants with lenders, or seeking injections of cash from donors, benefactors or principal shareholders. Generally, and understandably, the finance lending terms available to the sector are much more limited than they have been in the past and the cost of borrowing has risen. The general increases in uncertainty are manifest in the increased work auditors are doing to be able to confirm that institutions remain a “going concern.” Such measures can address short-term financial challenges but in most cases they are not a viable long term strategy for sustainability.

OfS reiterates the message that providers are obligated to be financially sustainable while delivering a high quality student learning experience and following through on all commitments made to students – but it’s clear that frontline services are in the frame for cuts and/or that there is a limit to the ability to reduce day-to-day spending or close courses even when they are loss-making if there is likely to be an impact on institutional mission and reputation. Discussions between OfS and directors of finance point to a range of wider challenges around increased need for student support, the difficulty of recruiting and retaining staff, the increasing costs of conducting research, and shifts in the student accommodation rental market. Some even pointed to the cost of investment in AI-detection software.

The future is murky

The bigger picture points to long term (albeit unpredictable) shifts in the underlying financial model for HE. Philippa Pickford’s view is that institutions may need to shift from taking a short-term view of financial risks to a longer-term horizon, and will need to grapple with what a sustainable long term future for the institution looks like if the market looks different from what they have been used to. Deferral of capital investment, for example, may keep things going for a year or two but it can’t be put off indefinitely. There’s a hint in the report that some institutions may need to invest in greater skills, expertise and capacity to understand and navigate this complicated financial territory – and OfS is taking an increased interest in multi-year trends in financial performance, estates data and capital investment horizons in its discussions with providers.

The situation remains, however, that OfS is primarily empowered to monitor, discuss, convene and, if necessary, issue directives relating to student protection. Activity of this nature has ramped up considerably in the past year, but financial sustainability remains, at base, individual providers’ responsibility – and system-level intervention on things like changing patterns of provision, or management of the wider impact of institutional insolvency, nobody in particular’s. Government is, of course, aware of the problem but has not yet given a steer on whether its upcoming HE reform measures, expected to be published in the summer after the spending review, will grasp the nettle in delivering the support for transformation the sector hopes to see.

OfS has now said that it is talking to government to put forward the view that there should be a special administration regime for higher education. This signals that while the immediate risks of institutional closure or “disorderly market exit” are low, the pressures on a small number of institutions remain considerable. On the assumption of little or very modest changes in the funding model in the upcoming spending review, and ongoing competitive pressures, there will almost inevitably be losers.

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May 8, 2025
OfS insight on institutional closure lacks a firm statutory foundation

The Office for Students’ (OfS) insight briefing “Protecting the interests of students when universities and colleges close” is as much a timely reminder of where the law falls short when providers are at risk of closure as it is a briefing on how to protect the student interest under the current policy framework.

As we set out in our Connect more report which explored, among other things, the legal framework for institutional insolvency, market exit and/or merger, the role of OfS in any institution at risk situation is already unhelpfully ambiguous. Its concern may be the student interest, but it is not empowered to prevent institutional closure (even if, as is often likely to be the case, the student interest would be best served by completing the course they registered for at the institution they enrolled in) – or even to impose order on a disorderly market exit.

In the absence of express powers or an insolvency or special administration regime for higher education, OfS’ role becomes one of a point person, facilitating conversations with other agencies and stakeholders, but with no powers itself to prevent a disorderly closure. The tone of the briefing is collaborative and collegiate but, in a world where students are no better protected than any other unsecured creditor if a provider becomes insolvent, it’s doubtful that, under the law as it currently stands, the interests of students will be protected to the degree to which OfS desires.

While OfS may be primarily concerned with protecting students’ interests, the trustees of those providers that are constituted as charities have a statutory duty to act in the best interests of the charity and to pursue their charity’s purposes. This duty will, of course, encompass the needs of present students but will also encompass past students, future students, research activities and much more besides. While no one would disagree with the general sentiment that “throughout the process [of institutional closure] the interests of students, and their options for continued study, must be kept in mind” – and the briefing does offer lots of useful ideas for how to ensure sufficient attention is given to the many types of students who will be affected – the elevation of student interest to a pre-eminent concern is not what the law generally, nor what OfS’ statutory duties currently require.

University executive teams and boards may wish, therefore, to read OfS guidance in light of these realities, and be aware of the limits of what is realistically possible or likely to occur in giving consideration to the sort of scenario planning and preparation OfS advocates in the briefing.

A herd of elephants

OfS’ recommendations about the need to have suitably durable and maintained student records and to have entered into binding contracts with validating and subcontracting partners that contain clauses that deal realistically with the end of the relationship and contain adequate data sharing agreements clauses are all well made.

But once things actually start to get tricky in real life there is a level of reliance on transparency, for example, in sharing information both with OfS but also with other organisations such as funding or regulatory bodies, or government departments, or even other institutions who might be prevailed upon to welcome displaced students. In the absence of a systematised notification process, any ambiguity about whose role it is to liaise with the various potentially affected stakeholders or the timing of any such communication has high potential to create problems. There are obvious issues raised by disclosing or revealing another institution’s “at risk” status, some of which may have the effect of accelerating the very process everyone is seeking to avoid.

If OfS considers a registered institution is at risk of closure, it can impose a student protection direction under condition C4 of the conditions of registration. The briefing provides a helpful reminder of what a student protection direction might include and encourages regular thought about these issues to avoid the need for a provider to “improvise at speed and under stress if an institutional closure becomes possible.” That sounds very laudable at first glance, but it confuses the regulatory obligation with the real-world outcome. A provider at risk of closure may well come under pressure from OfS to produce a market exit plan and to map courses at a time when university teams have the least bandwidth to undertake such tasks. In any case, it is highly doubtful whether an insolvency practitioner would be bound by such planning in the event that a provider goes into an insolvency process.

In scenario planning, OfS moots the idea that higher education providers might consider setting up “agreements in principle” with other institutions “to take on relevant students if one or the other closes” or even “possibly multiple agreements, for different courses and subjects.” It is surprising not to see competition law mentioned in this context. The higher education sector contains a broad range of institution types, with varied teaching and delivery methods, attracting students with different needs and expectations as regards learning and study.

This means that in practice the providers that pair up to take on one another’s students in the event of institutional failure will need to be similar types of provider – precisely those that are in competition for students in the first place. As Kate Newman has argued in an article on the impact of competition law on higher education collaboration, it would be helpful if OfS and the Competition and Markets Authority could jointly consider these kinds of circumstances for the sector as a whole rather than providers having to navigate this complex legal territory on an individual basis.

We’re also concerned that any such “agreement in principle” will not be legally binding and will have been reached at a single point in time, when conditions may be quite different to the time when the institutions seek to rely on them. There is a very real risk that unless these agreements are refreshed annually (a time consuming and potentially collusive activity) they will turn out to be like the original student protection plans in being not terribly helpful.

A sector like no other

In issuing its briefing OfS argues that “this sort of risk and contingency planning is normal in other regulated sectors,” citing the examples of customer supply contingency plans for energy suppliers and the need for banks to have recovery and resolution plans. However, both of these sectors have highly developed insolvency regimes. Drafting recovery and resolution plans is much easier to achieve when there is a viable insolvency process in place. Both the energy and banking sectors have special administration processes in place and there has been much recent press coverage on the water sector special administration process, in light of Thames Water’s difficulties.

OfS encourages institutions to undertake extensive course mapping. However, given the scale of the financial pressures facing the sector, it’s doubtful how valuable such course mapping is likely to be where potential recipient institutions are perhaps equally likely to be at risk of closure. To be fair to OfS, the briefing stresses that mapping is particularly relevant for those institutions that offer specialist provision.

And here, of course, lies the essential problem. As OfS states: “We have drawn on our experience of managing two relevant cases at small and specialist higher education providers during the past year, and of instances where there was a serious risk of a closure which did not materialise.” The counterfactual – closure of a large and generalist provider which does materialise – remains the biggest elephant in the room. While OfS’ openness in sharing its insights is to be welcomed, it does nothing to diminish the need for urgent structural change.

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April 5, 2025