Question to the Department for Education:

To ask His Majesty's Government what assessment they have made of the financial impact of the increase in employer National Insurance contributions announced in the Autumn Budget on higher education providers.

The government recognises that UK higher education (HE) creates opportunity, is an engine for growth in our economy and supports local communities. The 3.1% increase to tuition fee limits for the 2025/26 academic year will provide additional financial help for HE providers after seven years of no increases to maximum tuition fees, which has meant that fees have not kept pace with inflation. The department plans to publish an assessment of impacts, including on equality, of the planned tuition fee and student finance changes shortly.

The department is aware that HE providers will have to pay increased National Insurance contributions. As my right hon. Friend, the Chancellor of the Exchequer set out in the Autumn Budget 2024 statement, raising the revenue required to fund public services and restore economic stability requires difficult decisions, which is why the government has asked employers to contribute more.

The Office for Students (OfS) is responsible for monitoring and reporting on the financial sustainability of the HE sector. The OfS has made its own estimate of the impacts in their update published on 15 November 2024, and the update is attached.

The department also understands the financial pressures that the sector is currently facing, which is why my right hon. Friend, the Secretary of State for Education has already taken the first step of appointing Sir David Behan as interim Chair of the OfS to oversee the important work of refocussing the OfS’s role to concentrate on key priorities, including the HE sector’s financial sustainability. The department continues to work closely with the OfS as the independent regulator of HE in England to understand the changing financial landscape.

The department knows how vital securing a sustainable future for the HE sector is for the success of students. We will set out our longer term plans for HE reform by next summer.