The business models of Britain’s prestigious universities are struggling to maintain financial stability recently. While the country’s top educational institutions such as Oxford University have retained the global crown on Times Higher Education World University Rankings 2023 list, the prestige of a few big universities has masked a crumbling model of Britain’s higher education.
Several universities in the UK are hit by funding and strike by staff. According to a report by Bloomberg news agency, 70,000 people at 150 universities protested against falling pay, pension cuts, and poor working conditions last month. Simultaneously, the British government has mooted capping the number of foreign students.
Almost 30% of 274 universities and colleges were already in deficit at end of the 2021 academic year, according to data from the Higher Education Statistics Agency.
Even the Russell Group, 24 top institutions including Oxford and Cambridge, told a parliamentary committee earlier this year that the government needed to step in to shore up funding.
Rating agency Moody’s also downgraded the rating of prominent UK colleges Oxford, Cambridge, University College London, and others on 25 October.
According to experts, a combination of Brexit and the pandemic have exacerbated the frailties of the rank-and-file places that make up the backbone of the system, Bloomberg agency wrote.
Some academics opined that many are effectively running as unviable ‘companies’ that are over-reliant on students from China and India paying higher fees.
Professor Karin Lesnik-Oberstein told Bloomberg that the funding system in Britain is “hopelessly compromised,” dependent “largely on the money of overseas students, largely Chinese students”.
However, data suggests lower-ranking British universities are falling out of international favour anyway. Brexit has caused them to lose European applicants while higher-performing international students are less willing to pay top dollar for a product that may be losing its allure.
Citing data from UK universities, new enrolments from China fell for the first time last year, dropping 4.9% to 99,160 students. While Indian enrolments climbed almost 27%, the rate of growth is slowing.
That said, the UK still punches above its weight in higher education, especially compared with the rest of Europe, and has been cementing ties with Commonwealth countries since leaving the EU, said the agency.
This year in July, the UK and India signed an agreement in July aimed at boosting applicants further.
Many universities and their staff are getting more desperate, though. The University and College Union has reported that more than half of employees showed signs of depression, with 21% of academics working an extra 16 hours per week on top of contracted hours.
Post-Brexit funding chaos has complicated access to research money. In November, the EU’s refusal to grant the UK access to international science programmes forced the government to plug a $591 million gap in resources.
Universities UK, which represents 140 institutions, is calling for talks nationwide about the financial viability of the industry. The organisation says that funding is forecast to drop to the lowest when adjusted for inflation since the 1900s.
(With Bloomberg inputs)
Download The Mint News App to get Daily Market Updates.
