Higher Education Funding

Jessica Toale Excerpts

Wednesday 28th October 2026 Westminster Hall

[Abtisam Mohamed]

I agree with my hon. Friend; he makes an excellent point. Nottingham is seen as a university that needs support, and I think colleagues across the sector will look to see how Nottingham is supported alongside their own universities.

As I was saying, far too many institutions are being forced into a cycle of cuts just to temporarily balance the books. Over recent months, I have spoken to university leaders, staff, representatives of trade unions including the University and College Union, students and employers. While they all have very different perspectives, they all present a common diagnosis: the current funding model for higher education does not work. That raises a fundamental question: if we recognise universities as national assets, as our rhetoric often does, why have we systematically stripped back public funding and left them to shoulder so much of the financial burden themselves?

[Jessica Toale (Bournemouth West) (Lab)]

I thank my hon. Friend for setting out the real challenges that our higher education institutions face. Does she agree that the difficult financial position universities are in is causing them to oversubscribe their courses, putting unsustainable pressures on their workforce, reducing the student experience and increasing financial instability as a result of that boom and bust?

[Abtisam Mohamed]

My hon. Friend makes an excellent point. Universities need to be supported, so that the financial burden is not purely left for them to deal with.

I now want to come on to international students. International students should be welcomed as an enrichment of our campuses and strengtheners of Britain’s international ties. International students’ fee income has become an essential pillar, propping up our universities, cross-subsidising home students’ education and supporting research that would otherwise be cut, but universities did not become dependent on international fee income by choice. They have increasingly relied on it because domestic teaching and research funding has failed to keep pace with the real costs of delivery.

I and many others remain concerned about using an international student levy to pay for maintenance grants. It is seen as little more than an additional tax on one of the UK’s most successful exports. At a time when global competition for talent is increasing, we should be asking how we can strengthen one of Britain’s greatest success stories, not how we can make it less attractive. A restructured maintenance support system for home students, separate from international fee income, would be a vastly more successful policy, and it is one that I will continue to support.

Fundamentally, any solution to the sector’s funding crisis and support for the most disadvantaged home students should not further destabilise university finances. That is especially important in a context where universities are already cutting staff, courses and research programmes. Data from Universities UK shows that nearly eight in 10 universities have pursued voluntary redundancies in the last three years, and the same amount have frozen recruitment. The UCU estimates that 30,000 jobs have been lost over the last three years. That is devastating, and we should be clear about what it means: it means rising workloads and pay erosion for remaining staff, and it means staff who support students every day losing their livelihoods.

In Sheffield Hallam University’s case, more than 1,200 posts have gone in just over two years. Having met staff representatives and UCU members, I know that these numbers are not abstract; they represent people who have mortgages to pay, families to support and bills to meet. I also hear from many talented academics who are moving from one short-term arrangement to another, with little certainty about their future. The consequences are felt by individuals and the community beyond the university gates, but there are also implications for the future of British research. A system increasingly characterised by insecurity will only drive talented people away.

If universities are one of the UK’s greatest assets, why are they not considered to be involved in our economic growth? Although we speak of growth, skills and Britain’s future competitiveness, we see growing financial fragility across the very institutions that help to realise those ambitions. We cannot continue to expect universities to do more with less. Chasing efficiencies erodes capacity, and once capacity is lost, rebuilding it is neither quick nor easy.

I have a number of questions for the Minister. First, what is the Government’s long-term vision for higher education? I want to know not simply how individual institutions will survive the next financial year, but how universities will fit into a national strategy for growth, skills, research and regional development.

Secondly, does the Minister recognise that the current funding model has become overly reliant on international student income, mainly because teaching and research funding no longer meets the real cost that universities face? If the Government continue with the international student levy, what impact will it have, and how will fluctuations in student recruitment affect university finances? Does the Minister recognise that the institutions are likely to pass on those costs through higher fees, potentially making the UK a less attractive destination in the international student market?

Thirdly, does the Minister believe that the current balance between public and private contributions to higher education funding is sustainable? The Government now contribute about 16p for every £1 spent on teaching. Does the Minister believe that that is a viable basis for the future funding of higher education? Will the Government examine how to move towards a fairer balance between the individual and state contributions in the long term in recognition of the enormous public benefit that universities provide?

Fourthly, how are the Government assessing the economic impact of university job losses? We cannot call universities regional anchors while simultaneously accepting the loss of thousands of highly skilled jobs across the sector.

Finally, where do universities sit within the Government’s growth mission? If they are engines of growth, they should be treated as such, and they need a funding framework that recognises the enormous contributions that they make to our economy, our public services and our communities.

I want young people in Sheffield to have the opportunities that education gave me. I want our universities to continue training the nurses, teachers, engineers and researchers that our country desperately needs, and I want Britain to remain a world leader in higher education and research. If we want our institutions to survive, we have to stop treating them as an afterthought.