THE economic, social, and public benefits provided by universities are “threatened by the financial crisis” in higher education, the Bishop of Sheffield, Dr Pete Wilcox, has warned.
Contributing to a two-hour debate on the subject in the House of Lords last week, Dr Wilcox said that, in his diocese, the University of Sheffield and Sheffield Hallam University “support more than 19,500 jobs and generate more than £1 billion annually for the local economy. What is true in Sheffield is true across the country: universities are generally hugely beneficial to the communities within which they are situated.”
The Church of England believed that higher education should serve the common good, he said. The universities mentioned did this in a variety of ways, including private investment, and volunteer and work placements across health, social care, the law, and other areas.
“Civic activities such as these are seriously threatened by the financial crisis in HE and the perfect storm currently battering the sector.
“In the past few years, . . . there has been a drastic drop in EU students while international students from further afield are facing visa restrictions. UK students have been poorly placed to cope with the cost-of-living crisis, and I gather that a lower birth rate in the early 2000s means that there are reduced numbers of young people in the cohort currently in sixth-form and FE colleges.
“As a result, there has been increased competition between institutions for the same smaller pool of students, and the pinch has been felt most keenly by the smallest of our HE institutions.”
Dr Wilcox pointed to the Cathedrals Group of universities as an example: “These 14 institutions make higher education disproportionately available to under-served communities, such as rural and coastal areas. They typically have a higher proportion of students who progress to university when they are older and who are the first in their family to make that step.”
The debate was brought by the crossbench Lord Krebs, who said in his introduction that “we should be in no doubt that our universities are facing a funding crisis.”
He continued: “In its insight briefing of May this year, the OfS [Office for Students] notes that 74 of England’s universities will run a deficit in 2024-25 and that the forecasts of recovery in future years made by universities are based on overly optimistic assumptions, so that by 2026-27 nearly two-thirds are likely to be in deficit.”
The reasons were well-known, he said: the student fee had not increased since 2016; “most if not all universities have become dependent on income from overseas students to subsidise the rest of their activities”; and overseas applicants for taught Master’s courses had dropped after changes in the visa rules prevented their bringing families with them.
The Government should, he argued, consider short-term solutions, but “there is a longer-term question: is the university sector as a whole fit for purpose? Could the crisis be turned into an opportunity to rethink the size, shape, and role of the university sector?”
Responding to the debate, the Education Minister Baroness Smith of Malvern said that the Government had acted quickly to address the crisis, including “refocusing” the Office for Students on the issue of financial sustainability, and bringing in its interim chair. She continued: “We have already started reviewing options to deliver a more robust higher-education sector. It will take some time to get right, but I do not believe that it will take as long as some people fear.
“We are determined that the higher-education funding system delivers for our economy, for universities, and for students.”
She agreed with arguments about the benefits of universities: “Why do so many people . . . campaign for university campuses in their constituencies? It is because they understand the economic, social, and cultural power they can bring to the communities that they represent.”