Go Back
21st November 2023

Funding Crisis in UK Universities

Does the UK university system need a new funding model?

‘With the existing system now deep in crisis, policymakers might well find a rapid and bold resetting of the system is worth the risk.’ – Mark Corver DataHE

So what is behind the current funding  crisis?

The funding crisis in UK universities stems from a combination of factors, including high inflation, insufficient government support, and a flawed financial model where courses are capped at circa £9,000 a year. This has led to limited student choices, universities facing financial constraints, and a growing burden on the government.

What is the planned model to address this funding?

Mark Corver Managing Director for DataHE sketches out a model to help with the current university funding crisis. He suggests a bold reset of the system, his model involves students making a higher financial contribution but over a shorter period, basically receiving an advance on their anticipated higher future earnings. Universities would set course prices based on this potential salary, and the government would provide the foundation and  the operational funding required. The system would aim to remove the burden of long-term debt for students, provide financial stability for universities, and create a self-funding model for the government.

Our MD Kim is in agreement:

Addressing the university money problem by having students pay more based on their future earnings, would free up universities to grow, the government is there for support and infrastructure but everyone benefits, and the system becomes more self-sustainable. I see there are 3 key benefits for students, universities and the government:

Student Benefits:

  1. Informed Choices: Choose courses based on job market potential for better returns.
  2. Fair Repayment: Only repay if earning more than non-graduates, avoiding long-term debt.
  3. Quick Payback: Higher fees but shorter repayment periods, avoiding decades of financial commitment.

University Benefits:

  1. Financial Recovery: Restored resources ensure effective course operations.
  2. Market Alignment: Design courses based on job market demands for growth.
  3. Shared Risk: Government funding upfront, supplemented by graduate repayments, creating a balanced risk-sharing model.

Government Benefits:

  1. Self-Sufficiency: Higher education becomes self-funding, reducing financial risk.
  2. Smart Resource Allocation: Efficient allocation of resources for sustained university growth.
  3. Policy Control: Influence policy by adjusting dividends given back to students based on study areas or professions.

You can find the full HEPI paper published below.

Funding undergraduate higher education – HEPI

If you’re looking to develop insight led portfolio planning and student recruitment growth strategies then get in touch today:

Want to see what we can do for you?

Show Me