Higher Education Funding

Rupa Huq Excerpts

Wednesday 28th October 2026 Westminster Hall

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

“Crisis” and “world beating” are overused terms, and both apply to UK higher education, which, after an over-reliance on international fee income during years of underfunding, feels ready to snap. Four in 10 of the best universities on Earth are in Britain. Imperial College London, whose White City campus is in my seat, is one. It attracts the brightest brains for groundbreaking postdoctoral research, and its Scale Space facility incubates start-ups, but Home Office restrictions on dependants, the cutting of the post-study work visa, indefinite leave to remain changes and the new basic compliance assessment, which has inexplicably resulted in record visa refusals, have threatened all that. In a competitive world, international students have other options, which we see them opting for.

I am also the MP for the University of West London. It is not top 10, but it is a local anchor institution. It is a big employer and a vital hub for under-represented communities. Both universities are concerned by the international student levy. The return of maintenance grants, which the proceeds will fund, is welcome, but the £925 fee that universities must pay per international student per year of study at a time of falling student numbers is unviable. Given how course fees vary, why not a percentage—6% was originally mooted? What is the logic behind the the first 250 students being free of the charge? Sadly, the University of Suffolk has for the first time gone below that number—an unwanted situation—thanks to that perverse disincentive. Could we not increase the number?

Why are only the subjects in the Government’s industrial strategy funded by the grants? They include computing, maths and pure science, but no arts or social sciences, which potentially leaves those subjects to elites. Creative sector education—including at UWL, the old Ealing School of Art, which specialised for 100 years in art and the humanities and which was where the Who formed and Freddie Mercury studied—risks being wiped out along with jobs, as the University and College Union fears, because such subjects do not fit financial forecasts.

Our universities are not simply dreaming spires and ivory towers. They are essential invisible exports offering soft power and regional capacity building, with growth in every postcode. The University of Westminster, the first polytechnic, was founded to enrich the working man; its Soho Poly venue was where Pink Floyd played their early gigs, and things still happen there. We must treasure our wide diversity of institutions, not just throw them to the wall.

The Office for Students estimates that 119 universities—43% of the sector—will be in deficit this academic year, with 24 in danger of bankruptcy. After mergers and departmental closures, the next step, as predicted in the Education Committee’s excellent report, is insolvency. The Oxbridges will go from up here to down here, but where will the Suffolks and the UWLs go? Down there? Will it take someone to go bust before the Government finally take notice?

When I taught in the sector, international students, who spend money locally, were seen as the golden goose to compensate for real-terms funding cuts, but our over-reliance is now exposed. The basic compliance assessment’s red, amber and green ratings have become existential. The Government cannot rely on past laurels, then cash-starve a sector, demand gullible international students with limitless pockets, prop it up with staff good will and magically expect growth. The elasticity of demand inevitably snaps.

--- Later in debate ---

[The Minister for School Standards (Georgia Gould)]

It is an honour to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this really important debate. She is a passionate advocate for these issues: she has chaired the APPG on students and has regularly raised issues related to universities and students, and from her speech we heard how thoughtful and knowledgeable she is on these issues.

I also thank my hon. Friend the Member for Colchester (Pam Cox) for her characteristically thoughtful speech. She called for a wider debate, discussion and focus on these issues, and we have had a very important debate today. We have heard the range of expertise in the Chamber, from lecturers to others who have real experience of working in universities, and about the range of decades when everyone went to university—I cannot believe that anyone here looks old enough to have gone to university under Margaret Thatcher.

We should rightly be proud of our world-class higher education sector, which remains, by any objective metric, one of our nation’s greatest exports and a global beacon of intellectual excellence. We heard from my hon. Friend the Member for Ealing Central and Acton (Dr Huq) that the UK’s university sector includes four of the world’s top 10 universities, of which we can be very proud. It contributes more than £265 billion to the UK and supports more than 750,000 jobs. In my work as Schools Minister, I get to see directly the contribution that universities make to places and how integrated they are in local innovation, support and access.

I have spent quite a bit of time in Sheffield and have seen the contribution that the University of Sheffield and Sheffield Hallam University make to the local area, whether through their pioneering work on opening up participation to university or some of their wider research: Sheffield Innovation Spine, the work that Sheffield Hallam University is doing on early years and Sheffield Children’s University, and the work that the University of Sheffield is doing on adult social care.

As my hon. Friend the Member for Sunderland Central (Lewis Atkinson) was talking, I was reflecting on being in Sunderland two weeks ago, where we are working on Mission North East, and the role that Sunderland University is playing in partnership to support better outcomes for children in the area.

The Government are committed to maintaining a world-class higher education sector that delivers for students, our society and the economy. We of course recognise that the sector’s financial environment is challenging. The sector is rightly independent from Government, with providers managing their finances and ensuring that their business models provide long-term sustainability. However, I recognise the long-term challenges that many Members have raised and the strain that we saw over the last decade, including the legacy of seven years of frozen tuition fees. Universities have had to deal with the issues caused by that.

[Dr Huq]

I know the Minister is really passionate about this subject, and her Department has done excellent work with the Department for Work and Pensions on the phenomenon of those not in education, employment or training. A statistic shared by my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) was that the UK has the lowest proportion of public tertiary education expenditure among OECD countries. Could the Minister have a word with Treasury colleagues about nudging that upwards, because that is a statistic we are not so proud of?

[Georgia Gould]

Of course, I always support greater funding for education and young people, but I was just about to talk about some of the changes the Government are making to support sustainability.

After they were frozen for eight years, we increased tuition fee caps in line with inflation for 2025-26. We will increase them once again in line with forecast inflation in 2026-27 and in 2027-28. We will then legislate when parliamentary time allows to increase tuition fee caps automatically for future academic years. Over the coming year, that is £6 billion-worth of safeguarded indexed increase in income underpinned by the Government, which will make a real difference.

My hon. Friend the Member for Sheffield Central asked about the Government’s vision for universities. We have set out an ambitious programme of reform through the post-16 education and skills White Paper, with a clear vision for a more sustainable and collaborative higher education sector. We want providers to be clear about their distinctive roles but to be working in collaboration.

My hon. Friend also mentioned the importance of research. My hon. Friend the Member for Bury St Edmunds and Stowmarket (Dr Prinsley) talked about the pioneering research on prostate cancer at East Anglia. Research is a critical role that universities play. The Government are investing a record £86 billion in R&D from 2026-27 to 2029-30; as part of that, UK Research and Innovation will deliver an expected £38.6 billion of research investment, rising to nearly £10 billion per year by the end of that period. In the Department for Education, we are working closely with the Department for Science, Innovation and Technology to deliver the White Paper’s commitments, which include research funding reform and improvements to research grant cost recovery.

We heard from almost all the Members who spoke in the debate about the importance of opening up access and ensuring that young people who want to go to university can always pursue that route. That is why we do not support the Conservatives’ proposals, which would pull up the drawbridge because they are about reducing the number of young people going to university. We know that young people from disadvantaged backgrounds will be the ones who do not get that opportunity.