UK universities are set to lose more than £17bn in real income over the next four years as persistent inflation erodes the value of tuition fees, according to newly released research. Higher education software provider TechnologyOne modelled the total amount universities will lose to inflation each year up until 2026-27, by calculating the real-terms decline in tuition fee value and forward projections on student applicants.
Despite UCAS predicting a rise in student numbers in its ‘Journey to a Million’ report, universities are expected to lose £5bn each year due to persistent inflation. Tuition fees for domestic students have been capped at £9,250 since 2017, giving universities limited options to offset the impact of rising prices.
With financial constraints set to only increase over the next four years, universities have no room for error when it comes to spending decisions. With the pace of losses only accelerating, something has got to give, and universities cannot afford for that to be the quality of education, support services or the university experience overall.
Universities already make a loss on every home undergraduate, and that loss is only set to grow with inflation. This is evidently financially unsustainable in the long term and will ultimately impact on student and staff through deteriorating facilities or a reduction in staff:student ratios or student support services.
