Unis ‘receiving £6.4bn less’ a year for teaching than a decade ago

English universities are receiving £6.4bn a year less in real terms for teaching home students than a decade ago, according to new analysis from Universities UK.

Taking 2015–16 as the baseline, the study shows the teaching ‘unit of resource’ – combining tuition fees and direct government grants – has failed to keep pace with inflation. Funding per student in 2025–26 is projected to stand at 64% of its 2015–16 level.

The findings come ahead of this week’s Budget (26 November) and follow recent Office for Students (OfS) analysis predicting that 45% of universities will post a deficit this academic year, up from 34% when the regulator last assessed the sector six months ago.

Government plans to link tuition fees to inflation are expected to prevent the funding gap widening further, but UUK said the existing shortfall remains locked into the system without higher grant funding. The regulator has also estimated that a proposed tax on international students will add £780m a year in costs, while the inflation uplift to tuition fees will bring in £440m annually.

UUK’s earlier research with 60 members indicated the financial pressures have already led to reductions in provision. Almost half reported closing courses, while more than half had consolidated provision. Some universities have removed module options or closed departments, and many are considering cuts to research investment.

The organisation has urged the government to rethink its approach before the Budget, warning that an additional levy on international students will undermine the sector’s contribution to economic growth, skills and research.

Vivienne Stern, chief executive of UUK, said: “This Budget has to be about growth. The government has rightly identified universities as fundamental to this aim. They contribute over a quarter of a trillion pounds to the economy each year, they are a vital component of the skills system and provide the foundation of many new companies with the highest growth potential. The Secretary of State for Education was right to set the goal of putting universities on a firm financial footing.

“If that’s the goal, this research shows just how far off achieving that we are. Universities are cutting costs hard, losing jobs and courses as a result. They are also showing that they can do things differently, with mergers and collaboration on the cards for some.”

She added: “The decision to increase fees in England in line with inflation was brave, and the right thing to do. It is beyond disappointing that the government plans to remove more than the amount this will bring into universities through a new tax on international students. That is the opposite of helpful, taking us further away from the goal of financial stability; which we need to play our full part in delivering the government’s missions.”