- [Martin Vickers in the Chair]
- 2:30 pm
- I beg to move,That this House has considered the impact of university finances on jobs in higher education.It is a pleasure to serve under your chairmanship, Mr Vickers. The UK’s higher education sector is facing a severe financial crisis, with profound implications for both staff and students. Two years ago, university lecturers across the UK raised an urgent call for help when they voted to strike. Regrettably, their concerns were largely ignored. Over 5,000 job cuts have already been announced, with projections indicating that more than 10,000 jobs will be lost across the sector this year.The Office for Students’ latest modelling suggests that nearly three quarters of English higher education providers could be in deficit by 2025-26. The University of Bedfordshire in my constituency has recently announced plans to cut over 200 jobs as part of its efforts to address financial challenges. Several factors have contributed to this situation, including tuition fees that fail to cover actual costs, rising operational expenses and a significant decline in international student numbers from 5,270 in 2023 to just over 2,000 in 2025.The funding model, which depends on international students paying higher fees, has harmed universities since Brexit, as has the Conservative Government’s policy to crack down on student visas, despite international students contributing over £40 billion to the economy before the restrictions were introduced. The amount of income English universities receive for teaching home students has declined in real terms almost every year since 2015-16 and is now approaching its lowest level since 1997.
- I congratulate the hon. Member on securing the debate. A 2024 report from PwC said that 10 of Scotland’s 15 universities were at risk of falling into financial deficit by 2027. Of the 18 institutions that students can now study in, seven have a deficit, so there is a particularly acute issue in Scotland. Does he agree that falling Government investment is part of the issue? Indeed, in Scotland, it is 22% lower than it was in 2013-14.
- I will come to that point about universities in Scotland in a minute.Even prior to the 2022 reforms, the UK had the lowest share of public funding in tertiary education among OECD member countries, with the majority of the funding coming from fees and student loans. The tuition fee system is unpopular with both students and universities. Although reversing it may be unrealistic, the model has to be improved.A disturbing pattern of job cuts is emerging, with universities following suit at an alarming rate—even those that are running a surplus. Critical administrative and technical staff, key to the smooth running of courses and the welfare of students, are often the first to be let go. We are witnessing widespread deficits, restructuring, fire and rehire tactics and even the closure of entire departments, with faculties, schools and jobs being lost or downgraded. A survey of institutions in spring 2024 found that almost 40% had seen voluntary redundancies, almost 30% had reduced module choices for students and almost a quarter had closed courses.In just the past month, universities in Dundee, Coventry and Bradford have announced similar measures. Perhaps most shockingly, Kingston University has proposed the closure of its humanities department. The closure of a humanities department, in a country renowned for its literary and cultural heritage—Shakespeare’s birthplace, no less—signals a troubling future for our higher education system. It is not merely a loss for humanities; it is a loss for the future of education in our nation and a blow to our global reputation as leaders in education. These subjects are disproportionately impacted by the cuts, and that reinforces the damaging notion that studying arts is the privilege of a select few—a hugely regressive step.Under the previous Conservative Government a false narrative emerged, claiming that arts cannot equip students to thrive in a rapidly evolving world. In reality, these disciplines are adapted to a skills-based agenda, producing exceptional communicators, critical thinkers and researchers, which is still essential for a healthy democracy and a world increasingly driven by artificial intelligence.
- Before the hon. Member moves on, and to save people from going to the website, can I mention Brunel University? I have been on the picket lines with UCU, and there are large numbers of job cuts being threatened. It is a successful university that is doing everything asked of it by Government to provide skills training for the future. What is extremely disappointing to me is the refusal of management to even engage with the union to look at transitional arrangements and future planning. There must be a way in which we can work through this, after years of austerity. The Government must work with universities’ management and the unions to see the way through.
- I am grateful to the right hon. Member for his comments; I must make some progress now.Universities are major employers and significant contributors to local and national economies. A recent report on the economic and social impact of Lancaster University, for instance, found that it contributed £2 billion to the UK economy in 2021-22, with 61% of the impact felt in the north-west. If we continue to cut essential departments—English, nursing, modern foreign languages —where will our teachers and professors come from? The approach is so short-sighted. Without a strong university sector, how can the Chancellor grow the economy? Universities are central to delivering education, research and innovation in critical areas for future growth, including in science, technology, engineering and mathematics fields.Degree-level apprenticeships are another important part of the Government’s strategy to address skills shortages and rebalance the economy. By combining academic study with practical work experience, apprenticeships offer a valuable alternative to academic degrees, but when universities shrink, the skills gap will only widen. In the blink of an eye, we are losing thousands of years-worth of accumulated knowledge. The university exists to pass expertise to the next generation; there is a moral imperative to protect it.I urge the Government to review university governance and ask why expensive building programmes are being prioritised over investment in staff and students. Multi-year commitments on research and higher education funding are expected in June, when the Government’s spending review is finalised. The reduction in faculty options, loss of vital services and pressure on remaining staff all contribute to a diminished quality of education. This is not the future we should offer our students. We have to fix the broken funding model, safeguard staff, enhance the student experience, and ensure that our universities continue to be engines of economic growth and innovation.
- The hon. Member is making the powerful point that money should be put into staff and students. In my constituency, the University of Dundee faces critical challenges just now, with almost 700 jobs at risk. My thoughts are with those staff, and I thank the Scottish Government for the £22 million package of support for them. Does he agree that the UK Government need to reverse the Tory hostile environment policy for international students that means they cannot bring members of their family here? It has cost our university alone more than £12 million. Does he agree further that the national insurance contributions increase—an additional £3 million that the University of Dundee has to find—needs to be stopped right now?
- I am asking the Government to look into this whole scenario very carefully, because it is impacting staff, students and future generations.Higher education in the UK is at a crossroads. We have a choice: continue down this path of a boom-and-bust approach, cutting jobs and course offerings, or make the necessary investment to secure our universities as pillars of innovation, growth and opportunity. I urge the Government to take immediate action to address the crisis, consider a sustainable funding model, look at capping the numbers for a fairer distribution of students, and look again at student visas, to save our universities. They must ensure that higher education remains a vibrant and accessible resource for future generations.
- Several hon. Members rose—
- I remind hon. Members that they should bob, as indeed they are, if they wish to be called in the debate. It will clearly be necessary to impose a time limit, so we will start with four minutes. Jim Shannon will show us how to go about it.
- 2:43 pm
- Mr Vickers, you are very kind to give me the challenge of four minutes; it will probably be an eight-minute speech in four minutes. I thank the hon. Member for Bedford (Mohammad Yasin) for setting the scene so very well and for providing lots of detail and information.I wish to give a Northern Ireland perspective. We witness hundreds of students going to different areas in the UK to study. There is no doubt that the financial stability of our higher education facilities is important, so it is vital that we are here to discuss it.As in many other areas, Northern Ireland has a different set of guidelines when it comes to higher education. Our approach is distinctive, because we have oversight from a Government Department: the Department for the Economy. In the 2012-13 financial year, the combined income of higher education institutions in Northern Ireland was approximately £502.9 million. Fast forward to 2023, and Queen’s University—Northern Ireland’s primary education facility—reported a total income of £474.2 million. I thank Queen’s University and Ulster University for the partnerships they have and for trying to find cures for some of the great diseases and problems, including heart disease, diabetes, cancer, cardiac arrest and eyesight issues.Furthermore, there are growing concerns about the higher education sector’s reliance on international tuition fees. The House of Commons Public Accounts Committee has warned that higher education providers are potentially exposing themselves to significant financial risks if future growth in international student numbers is not high as they expect or had hoped. For example, Ulster University back home in Northern Ireland did experience increases in income, with tuition fees from international students rising by more than 50% in the 2021-22 financial year, reaching some £12 million.Although it is understood that we cater for and are generous in welcoming international students, as we should be, when I spoke to students in my constituency it became clear that many are put off going to England, Scotland and even Northern Ireland for university placements because of the intense tuition costs. Yes, universities rely on fees to deliver fantastic programmes across the board for lots of people, and they train our young ones for the future to get them the jobs that will help the economy to grow, but it is no secret that the levels of tuition fees are extortionate, and they will have to be paid back.
- 2:47 pm
- It is a pleasure to serve under your chairship, Mr Vickers. I thank my hon. Friend the Member for Bedford (Mohammad Yasin) for securing this important debate. I draw attention to my entry in the Register of Members’ Financial Interests. I am a member of the UCU and a former professor in higher education.As someone who dedicated over 20 years to teaching and research in higher education, I have seen at first hand the transformative power of that work. Students’ lives are changed, economies grow, communities are transformed and cities are lifted. Despite the challenging times facing the sector, I remain optimistic about the future of our universities and the vital role they play in our society, but we need to act before it is too late—which means sooner rather than later.The current financial model for universities is the most challenging it has been since the previous Labour Government enabled so many to access higher education. Members will know that in 2012 a cap on the domestic tuition fee was introduced, which increased only slightly in 2017 and again this year. It has not kept pace with inflation, and the financial strain is felt across the sector.Research funding is another area of concern. We cannot have universities without research, because the research informs the teaching. That is the nature of the beast and of the game. The UK rightly prides itself on being a global leader in innovation. Our universities are world class and attract people from around the globe. Research often runs at a loss and is subsidised by education provision, even though that research underpins our productivity and economic growth. That is the case in any sector I could name: AI, defence, health, life sciences and the creative industries. If the universities were taken away, where would we get that innovation—accessible innovation that is open to all—from?As my hon. Friend the Member for Bedford said, international student recruitment has been severely affected. The University of Essex, where I taught, has seen a 47% decline in EU student enrolments post Brexit, and recent changes to visa policies have contributed to a 40% drop in international student numbers. The subsequent reduction in income exacerbates the financial challenges faced by the sector.
- 2:51 pm
- In following the hon. Member for Colchester (Pam Cox), I should refer to my entry in the Register of Members’ Financial Interests. I am a vice-chair of the all-party parliamentary university group and I am proud of my relationship with the University of St Andrews. The hon. Member talked about her experience; I was previously assistant vice-principal at St Andrews, with oversight of recruitment and internationalisation—areas that are crucial to the health of the university sector.Today, I will remain closer to home and talk a little bit about the University of Dundee. My hon. Friend the Member for Dundee Central (Chris Law) has already referred to this issue. I should also register my interest as a graduate of the university. Like most people locally, the university is very much part of my family, with my father also being a graduate of it and my grandmother having worked there as a cleaner.Before I move on, I want to make clear something that we do not hear enough in this place. Our higher education sector thrives and is world leading in teaching and in research because it is international, and because it is competitive and brings in the best researchers and students from all over the world. It will remain competitive only if it remains international. Today, the University of Dundee and the city face 700 job cuts. That would be devastating for families, for the city and for Scotland and the wider UK. We all benefit from the research and the teaching there.The main issue that has been highlighted—it dwarfs all the others—is the huge drop in international income. The acting principal, Professor O’Neill, told the Scottish Parliament recently that“changes in immigration policy and related factors…have had a negative impact on our international student recruitment.”
- I agree with the hon. Gentleman’s points about the impact of immigration policy—the sector needs a policy that helps it to attract the best staff and the best students—but he will know that the challenge facing the sector in Scotland is long-lasting and is due to underfunding. Student fees have dropped substantially below the level in England and there has been a cap on places. That is why universities in Scotland have had to look overseas so much. Does the hon. Gentleman share my disappointment that this year Scottish universities faced a real-terms cut from the Scottish Government?