Committee publication · Correspondence · 14 April 2026
Joint letter from UCEA and UUK on Higher Education and Funding: Threat of Insolvency and International Students 20.03.26
From: Education Committee
Inquiry: Higher Education and Funding: Threat of Insolvency and International Students
Summary
UCEA and UUK joint letter to the Education Committee chair urging an explicit recommendation to government to amend regulations allowing higher education institutions mandatory participation in the Teachers' Pension Scheme to offer alternative pension schemes. The letter warns that unsustainable employer contribution rates (over 20% for 5+ years) combined with £3.7bn in estimated funding cuts to 2029–30 threaten institutional solvency and workforce stability.
Key findings
- Post-92 HEIs and conservatoires faced a 40% increase in TPS costs (16.48% to 23.68%) from April 2019, with a further 5 percentage point increase in 2024, and unlike schools received no additional government financial support.
- TPS mandates have forced course closures, teaching staff reductions, redundancies, and some HEIs establishing subsidiary companies with alternative cheaper pension schemes, fragmenting the workforce and creating industrial relations issues.
- UUK estimates government policy decisions (including International Student Levy, policy changes on international recruitment, and National Insurance rises) will reduce HE funding by £3.7bn from 2024–25 to 2029–30.
- Many smaller institutions operating on thin margins lack capacity to make savings or set up subsidiaries to circumvent TPS obligations, elevating insolvency risk.
- UCEA and UUK propose government permit flexibility for affected HEIs to offer alternative schemes including Collective Defined Contribution pensions, requiring urgent government decision.
Tone
AdversarialTopics
Key actors
Helen Hayes MP, Universities and Colleges Employers Association (UCEA), Universities UK (UUK), Raj Jethwa, Vivienne Stern, Baroness Smith
Notable line
“The sector is no longer as resilient as it once was and is unable to continue to absorb these costs.”
Key Quotes
“Unlike schools and colleges, HE employers in the TPS did not receive any additional financial support towards increases in their TPS employer contributions.”
“A further 5 percentage point increase in the TPS employer contribution in 2024 has been a major contributing factor to wide-spread redundancies across affected HEIs.”
“Employers have been paying contributions of over 20% for more than 5 years which is unaffordable and not sustainable.”
“UUK estimates that government policy decisions will lead to an estimated £3.7 billion reduction in funding to HE providers in England from 2024-25 to 2029- 30 1 .”
“A decision is needed soon.”
Source · parliament.uk record ↗