A major English university has drawn up plans to avert the risk of breaching its agreements with banks, as a crisis in higher education funding continues to take hold.
Sheffield Hallam University said shortly before Christmas that it was opening a voluntary severance scheme to all 1,700 of its academic staff to address “financial challenges due to a combination of increasing costs associated with inflation, rising pension costs, and a flat undergraduate fee”. That was one of the most severe responses yet to sector-wide funding problems that combine an ongoing freeze in the English fee cap at £9,250 with the first signs of a fall in overseas recruitment, which universities have relied on to compensate for real-terms cuts in domestic teaching funding.
Now Sheffield Hallam – England’s fourth biggest recruiter of home students, with nearly 30,000 – has published its financial statements for 2022-23. The university recorded a deficit of £4.7 million, down from a £15.1 million deficit the previous year. However, with pension adjustments excluded, the university’s underlying operational deficit was £1.1 million, compared with a £5.6 million surplus the previous year.
Sheffield Hallam’s financial statements also say that “the university has drawn up mitigating actions to ensure that there are no covenant breaches”.
