Universities: Funding and Employment

James Naish Excerpts

Wednesday 2nd April 2025 Westminster Hall

[James Naish (Rushcliffe) (Lab)]

It is a pleasure to serve under your chairship, Mr Vickers. I congratulate my hon. Friend the Member for Bedford (Mohammad Yasin) on securing this important debate. I note with sadness that barely any Conservative Members—whose party presided over the system when it was in government —are here.

The impact of university finances on jobs in higher education is felt deeply in my constituency of Rushcliffe, which is not only home to a University of Nottingham campus but sits in the middle of a fantastic cluster of east midlands universities: the University of Nottingham, Nottingham Trent University, the University of Derby, Loughborough University, the University of Leicester and De Montfort University. The universities are all vital to our local economy and play a major role in producing spin-out businesses, which in turn create high-quality jobs for local people.

However, as has been admirably described by many hon. Members, the pressure of the funding crisis in higher education is already being felt locally. In 2024, Nottingham Trent University removed over 230 staff members in a cost-cutting drive. The University of Nottingham has also faced a highly challenging year, reporting a £17 million loss. Those are not isolated events; they are part of a sector-wide crisis. The University and College Union has warned that over 5,000 jobs are already marked for cuts this year and, if current trends continue, more than 5,000 additional posts could follow. That equates to thousands of lecturers, researchers and support staff, many of whom are already working under precarious contracts, now facing uncertainty or redundancy.

The consequences of the crisis extend far beyond employment. When institutions are forced to shrink their workforce, course offerings are reduced, class sizes rise and students—especially those from disadvantaged backgrounds—lose access to the quality education that they deserve. The knock-on effects on research output, regional economies, and especially the UK’s global reputation for higher education, are significant.

University finances are being squeezed on multiple fronts: numbers of international students are declining, costs associated with inflation and pension liabilities are increasing, and income from domestic tuition fees is flatlining. For many institutions, especially those without large endowments or global brand recognition, the financial model is simply no longer sustainable. We therefore need a serious review of governance structures across the sector. Will the Minister explain what the Government are planning to do in this regard? If some institutions are being forced into short-term reactive cuts, while others remain relatively stable, we must ask why. Are decisions being made transparently? Are senior management teams being held to account for financial planning? How can we ensure that long-term educational quality is prioritised over short-term balance sheets?

Today’s debate is not simply about special treatment for one sector; it is about recognising that higher education is a national asset. Universities drive innovation and regional economies and provide opportunities to millions. If we allow them to hollow out their workforces, we risk eroding the very foundation on which they stand. I know that many Members across the House have universities in their constituencies facing similar pressures, and I hope that today’s debate serves as a call to action, not just to acknowledge the funding crisis in the higher education sector, but to begin charting a new, sustainable path for its future.

[Martin Vickers (in the Chair)]

We now come to the Front Benchers. If they limit their contributions to nine minutes, we will just have time for Mr Yasin to sum up.