Unis seek funding help as freshers pack for term

British universities say they are at "a fork in the road" and will "slide into decline" without action to sort out their finances.

Universities UK president Prof Dame Sally Mapstone will call on the government to rethink how they are funded, as universities prepare to make more cuts this year.

Vice-chancellors are gathering in Reading this week, ahead of a new academic year, which, for those trying to balance their books, looks set to be gloomy.

The skills minister has said the government is "considering all options" but any solution should not place all responsibility on the state.

Students have been warned they may see cuts to staffing and courses, as universities grapple with UK tuition fees worth less than they used to be and fewer international students to make up the financial shortfall.

The Office for Students has said 40% of universities in England are predicting deficits.

In a speech to the vice-chancellors, Dame Sally will call on the government to work with universities to address their financial problems - citing London Economics research, commissioned by Universities UK, suggesting universities contribute a net £265bn to the economy.

"We can choose to act to ensure our universities thrive or we can allow them to slide into decline," she will say.

"For me, the latter path would be unconscionable."

Universities UK, which has 141 members, would soon lay out proposals for a "reset" of the sector, including "a rebalancing of responsibility for funding in England to recognise the significant benefits to the Treasury generated by graduates", Dame Sally added.

Skills Minister Baroness Jacqui Smith told the conference on Wednesday: “We are carefully considering all options to deliver a more robust higher-education sector.

“We’re working on it now - but this isn’t something that’s going to happen overnight.”

A key consideration was how to put universities in a “sustainable financial position” in a way that “doesn’t [place] on to the state the whole responsibility for funding of our higher-education system”, Lady Smith said.

“You cannot have independence and then also expect there to be a wholly state-funded system,” she added.

Education Secretary Bridget Phillipson has previously said universities were expected to “manage their budgets”.

University and College Union general secretary Jo Grady, who has called for bailouts for struggling institutions, said “increased public funding will be necessary”.

But she added: “University leaders cannot be handed blank cheques: they must use public money to invest in their own workforce.”

Tuition fees in England have remained more or less the same since 2012 - but they are worth less because of inflation.

Universities have been recruiting more international students - who pay higher fees - over a number of years, to make up for a loss in funding.

But far fewer study visas have been issued to international students this year, following changes to visa rules and a currency crisis in Nigeria.

And universities have been recruiting more domestic students in an effort to shore up their funding.

More students were accepted into their first-choice university this summer and some universities offered the chance of rent-free accommodation and cash prizes to encourage applications through clearing.

And as of Friday, 30 August, the number of 18-year-olds in the UK accepted into universities that require the highest grades had risen by 13% compared with the same point last year.

A Department for Education official said: “The government is committed to breaking down barriers to opportunity and enabling everyone who meets the requirements to go to university.

“We will create a secure future for our world-leading universities as engines of growth and opportunity so they can deliver for students, local communities and the economy.

“The education secretary has taken the crucial first step of refocusing the role of the Office for Students, so that it focuses on key areas, such as monitoring financial sustainability, to ensure universities can secure their financial health in the longer term.”