Are UK Universities going bust?

Following a Channel 4 interview, minister for higher education, Baroness Jacqui Smith, has not ruled out the forced closure of UK universities due to a funding crisis.

Record numbers of young people are getting their first-choice universities, and more disadvantaged students are getting places this year. This is excellent in terms of social mobility and increasing equality within education.

However, these record high numbers highlight something more economically sinister – the funding crisis in the higher education sector.

Universities across the UK are at risk of going ‘bust’, with institutions crumbling under the current economy. No university is entirely safe from the funding crisis, with highly rated Russel group establishments, such as Cardiff University, facing massive deficits.

Their struggle can be seen through ‘plans to scrap its ancient languages degrees entirely.’

Similar cases can be found for Goldsmiths University of London, University of York, Oxford Brookes, and multiple other well-known institutions. This has forced some university’s to talk about merging.

Why are universities crumbling under financial crises?

In hindsight, it can be narrowed down to the end of low interest rates, which are then being catalysed by the decline in the real value of student tuition fees, falling foreign student numbers, and ineffective management.

Nonetheless, the fee structure from the 2010 coalition government is largely to blame. Its architecture rose domestic tuition fees to £9,250 a year and almost entirely eliminated government intervention – making UK universities overly reliant on overseas students’ tuition fees.

There has been a wave of concern after Baroness Jacqui Smith claimed that Labour would be willing to let universities go ‘bust’ if ‘necessary.’ Rather than fixing the underlying issues of the fee structure, ineffective management and fall in value of tuition fees and international students.

It’s clear that Labour is not intending to alter the current immigration position for students, despite its likeliness to help universities stabilise their finances. Rather Baroness Jacqui Smith told Channel 4 that the decline in international students was a result of the ‘rhetoric that the last government used.’

She claims that Labour will tackle this by ‘setting a different tone.’

Can the government tackle this through a change in narrative?

The minister of education appears to have undermined the complexity of the issue.

Popular Social media news outlet, Novara Media, puts it well, claiming that they ‘don’t think we need to be looking at closing universities or closing departments (…) Mickey Mouse Studies, that’s not the problem, the problem is poor management, the end of low interest rates, falling foreign student numbers and the fees architecture’.

The 2010 coalition’s decision to increase tuition fees and extend establishments independence has undoubtedly destined universities to suffer.

Time will tell if the future will blame Labour for failing to address the problems and reverse an acceptance of universities becoming so-called market anchors.