Committee publication · Correspondence · 20 May 2025
Letter from Secretary of State on Higher Education 14.05.25
From: Education Committee
Inquiry: Higher Education and Funding: Threat of Insolvency and International Students
Summary
Secretary of State Bridget Phillipson responds to the Education Committee's letter on higher education, acknowledging serious financial pressures on universities. The government outlines action taken including appointing Professor Edward Peck as OfS Chair, increasing tuition fees by 3.1% to £9,535 for 2025/26, and plans to strengthen governance oversight and international student policy through measures including a potential levy on international student income.
Key findings
- Government acknowledges serious financial challenges in higher education including insolvency risks, research funding shortfalls, and operational cost increases, but frames these as inherited from the previous administration.
- Tuition fee cap increased by 3.1% (from £9,250 to £9,535) for 2025/26 academic year to address financial pressures on universities.
- Professor Edward Peck appointed as substantive Chair of Office for Students to focus on sector financial sustainability and monitoring, replacing interim Chair Sir David Behan.
- Government proposes exploring a levy on higher education provider income from international students, with proceeds reinvested in domestic higher education and skills.
- Graduate visa duration to be reduced from 2 years to 18 months (except PhD graduates retaining 3 years); visa compliance requirements for universities to be strengthened to reduce immigration system abuse.
- Government consulting on strengthening oversight of franchised/subcontracted higher education delivery, with proposals to bring more partners under direct OfS regulation.
Tone
ProceduralTopics
Key actors
Bridget Phillipson, Helen Hayes, Professor Edward Peck, Sir David Behan, Baroness Smith of Malvern, Office for Students, Committee of University Chairs, Competition and Market Authority
Notable line
“The dire situation we inherited has meant this government must take tough decisions to put universities on a firmer financial footing …”
Key Quotes
“The dire situation we inherited has meant this government must take tough decisions to put universities on a firmer financial footing, so they can deliver more opportunity for students and growth for our economy.”
“Government acknowledges the serious challenges highlighted during the evidence session, including concerns about the financial state of higher education providers, research funding shortfalls, increased operational costs, and the risk of insolvency for some institutions.”
“Universities are independent from government and as such it is their responsibility to operate effective business models that will safeguard their long-term sustainability.”
“… we will always welcome international students where they meet the requirements to study in this country.”
“The government is clear that there needs to be a focus on and improvement in providers' governance.”
Source · parliament.uk record ↗