Committee publication · Correspondence · 7 May 2025
Letter to Rt Hon Bridget Phillipson MP, Secretary of State for Education on Higher Education 06.05.25
From: Education Committee
Inquiry: Higher Education and Funding: Threat of Insolvency and International Students
Summary
The Education Committee writes to the Secretary of State for Education following an 8 April evidence session on higher education financial pressures. The Committee heard testimony on university insolvency risks, research funding shortfalls (69% of full economic costs), student maintenance inadequacy, and barriers to inter-institutional collaboration. It seeks urgent government responses on university collaboration frameworks, insolvency contingency planning, international student policy certainty, governance strengthening, and scope of promised summer 2025 higher education reform plans.
Key findings
- Multiple universities face severe financial pressure driven by 13-year tuition fee freeze, reduced international student numbers from immigration policy changes, research funding covering only 69% of full economic costs, and weak governance in some institutions
- Research funding has repeatedly fallen below the Government's 80% commitment, with particular risks to arts and humanities; employers' national insurance increases and high teacher pension contributions (post-1992 universities) create additional cost pressures
- Significant insolvency risks identified; Sir Philip Augar stated universities cannot be allowed to fail due to impacts on students, staff, local economies, and UK international reputation
- Universities lack ability to collaborate on regional course provision due to Competition and Markets Authority rules; witness cited Manchester Metropolitan University's economic value exceeding both Manchester football clubs combined
- Student maintenance funding levels thought insufficient; concerns raised about future availability of courses at regional and national level; Government committed to higher education reform plan by summer 2025
Tone
CriticalTopics
Key actors
Helen Hayes MP, Bridget Phillipson MP, Sir Philip Augar, Baroness Smith, Education Committee, Competition and Markets Authority, Office for Students, Welsh Government
Notable line
“… we cannot allow a university in England to fail or go under" due to the impact on current and past students, on staff, the local area and the UK's international reputation.”
Key Quotes
“… we cannot allow a university in England to fail or go under”
“… include the actions that we expect from the sector as part of this major reform, and we will have more to say about the long-term financial stability of the sector again”
Source · parliament.uk record ↗