Universities: Funding and Employment

Wendy Chamberlain Excerpts

Wednesday 2nd April 2025 Westminster Hall

[Mohammad Yasin (Bedford) (Lab)]

I beg to move,

That this House has considered the impact of university finances on jobs in higher education.

It is a pleasure to serve under your chairmanship, Mr Vickers. The UK’s higher education sector is facing a severe financial crisis, with profound implications for both staff and students. Two years ago, university lecturers across the UK raised an urgent call for help when they voted to strike. Regrettably, their concerns were largely ignored. Over 5,000 job cuts have already been announced, with projections indicating that more than 10,000 jobs will be lost across the sector this year.

The Office for Students’ latest modelling suggests that nearly three quarters of English higher education providers could be in deficit by 2025-26. The University of Bedfordshire in my constituency has recently announced plans to cut over 200 jobs as part of its efforts to address financial challenges. Several factors have contributed to this situation, including tuition fees that fail to cover actual costs, rising operational expenses and a significant decline in international student numbers from 5,270 in 2023 to just over 2,000 in 2025.

The funding model, which depends on international students paying higher fees, has harmed universities since Brexit, as has the Conservative Government’s policy to crack down on student visas, despite international students contributing over £40 billion to the economy before the restrictions were introduced. The amount of income English universities receive for teaching home students has declined in real terms almost every year since 2015-16 and is now approaching its lowest level since 1997.

[Wendy Chamberlain (North East Fife) (LD)]

I congratulate the hon. Member on securing the debate. A 2024 report from PwC said that 10 of Scotland’s 15 universities were at risk of falling into financial deficit by 2027. Of the 18 institutions that students can now study in, seven have a deficit, so there is a particularly acute issue in Scotland. Does he agree that falling Government investment is part of the issue? Indeed, in Scotland, it is 22% lower than it was in 2013-14.

[Mohammad Yasin]

I will come to that point about universities in Scotland in a minute.

Even prior to the 2022 reforms, the UK had the lowest share of public funding in tertiary education among OECD member countries, with the majority of the funding coming from fees and student loans. The tuition fee system is unpopular with both students and universities. Although reversing it may be unrealistic, the model has to be improved.

A disturbing pattern of job cuts is emerging, with universities following suit at an alarming rate—even those that are running a surplus. Critical administrative and technical staff, key to the smooth running of courses and the welfare of students, are often the first to be let go. We are witnessing widespread deficits, restructuring, fire and rehire tactics and even the closure of entire departments, with faculties, schools and jobs being lost or downgraded. A survey of institutions in spring 2024 found that almost 40% had seen voluntary redundancies, almost 30% had reduced module choices for students and almost a quarter had closed courses.

In just the past month, universities in Dundee, Coventry and Bradford have announced similar measures. Perhaps most shockingly, Kingston University has proposed the closure of its humanities department. The closure of a humanities department, in a country renowned for its literary and cultural heritage—Shakespeare’s birthplace, no less—signals a troubling future for our higher education system. It is not merely a loss for humanities; it is a loss for the future of education in our nation and a blow to our global reputation as leaders in education. These subjects are disproportionately impacted by the cuts, and that reinforces the damaging notion that studying arts is the privilege of a select few—a hugely regressive step.

Under the previous Conservative Government a false narrative emerged, claiming that arts cannot equip students to thrive in a rapidly evolving world. In reality, these disciplines are adapted to a skills-based agenda, producing exceptional communicators, critical thinkers and researchers, which is still essential for a healthy democracy and a world increasingly driven by artificial intelligence.

The English higher education sector contributes £95 billion to the UK economy, while our vibrant creative industries generate £125 billion in gross value added each year. Last year, Labour unveiled our exciting plans for the arts, culture and creative industries as key sectors for driving economic growth, but none of that can be achieved without investing in the teachers and lecturers who train the next generation of skilled professionals. Post-1992 universities, which often serve the most diverse student demographics, are hit the hardest. Many students in those institutions are the first in their families to attend university and come from lower socioeconomic backgrounds. These universities are essential for students who cannot afford to live away from home.

The problem for the arts and humanities is not confined to post-’92 universities. Newcastle University, whose chancellor is the chair of the prestigious Russell Group, has announced plans to cut 300 full-time positions, including 65 academic roles. Cardiff University also plans to cut 400 academic staff, which is almost 10% of the total, and to eliminate subjects like music, modern languages, and nursing, despite ongoing NHS workforce shortages. The University of Edinburgh has a £140 million deficit forecast over 18 months, which outstrips the £30 million deficit recorded by Cardiff University. Durham University has joined the ranks of Russell Group institutions planning job cuts, with a target of reducing staff costs by £20 million over two years, starting with 200 professional services staff this year.

For a full view of the scale of the cuts, people can visit the UK HE shrinking page, compiled by Queen Mary University of London and the University and College Union, which tracks redundancies, restructures and closures across the sector.