Committee publication · Correspondence · 15 June 2026

Correspondence to the Minister for Skills on the financial sustainability of higher education institutions in Northern Ireland, Scotland and Wales

Inquiry: Prisons, Probation and Rehabilitation in Wales

Summary

The Welsh, Scottish, and Northern Ireland Affairs Committees jointly write to the Minister for Skills expressing concern about the financial sustainability of higher education institutions across the three nations. Despite world-leading research and teaching contributions, HEIs face acute funding pressures from declining international student income, insufficient undergraduate tuition fees, and rising operational costs. The committees seek clarity on UK Government support mechanisms, devolved administration coordination, and long-term sustainability strategies.

Key findings

Majority of Scottish HEIs now operate in deficit; all three devolved administrations are reviewing sector funding frameworks
Research funding via UK research councils delivers only 80% of full economic costs, below the Government's stated commitment level
HEIs report common funding pressures: insufficient undergraduate teaching income, rising pension costs, and UKRI mechanisms misaligned with institutional circumstances
Northern Ireland faces 'brain drain' with only 30% of undergraduates who move to Great Britain returning; Wales has lowest university application rates among 18-year-olds in the UK
Universities across the three nations have announced redundancy programmes to address financial difficulties

Tone

Critical

Topics

higher-educationdevolved-fundingresearch-fundingregional-economicsstudent-recruitment

Key actors

Baroness Smith of Malvern, Tonia Antoniazzi MP, Patricia Ferguson MP, Ruth Jones MP, Helen Hayes MP, UK Research and Innovation (UKRI), University of Edinburgh, Cardiff University, Swansea University, Queen's University Belfast

Notable line

“HEIs in Northern Ireland, Scotland and Wales stand out as major success stories, delivering world‑leading research and teaching across multiple disciplines.”

Key Quotes

“HEIs in Northern Ireland, Scotland and Wales stand out as major success stories, delivering world‑leading research and teaching across multiple disciplines.”
— Welsh, Scottish, and Northern Ireland Affairs Committees · opening statement on institutional quality

“In Scotland, the majority of HEIs are now in deficit and all the devolved administrations are reviewing the frameworks by which they fund the sector.”
— Welsh, Scottish, and Northern Ireland Affairs Committees · describing current financial crisis

“… research funding delivered via the UK's research councils does not meet 80 per cent of full economic costs, the level that the Government has committed to fund.”
— Welsh, Scottish, and Northern Ireland Affairs Committees · citing Education Committee findings on research funding shortfall

“… only 30 per cent of students who move to Great Britain return to Northern Ireland, a problem exacerbated by the limited number of students HEIs can take”
— Welsh, Scottish, and Northern Ireland Affairs Committees · describing Northern Ireland student retention and capacity constraints

“Wales, problems persist with attracting young people into higher education with the low est university application rates among 18‑year‑olds anywhere in the UK.”
— Welsh, Scottish, and Northern Ireland Affairs Committees · describing Wales-specific recruitment challenges

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Source · parliament.uk record ↗