Spending on top UK universities is on the rise

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More than a third of the UK’s top universities were forced to make further redundancies last year, while retirement spending across the Russell Group rose by more than a fifth, according to Financial Analysis Times.

Ten of the 24 universities in this group they said they have implemented voluntary retirement plans in 2024, offering workers compensation packages in order to take up voluntary work.

The rate of layoffs rose after a sharp decline in the number of foreign students. An analysis of annual financial statements showed that a total of 22 Russell Group universities paid out £70mn in the last academic year, a 29 per cent increase on the £54mn spent in 2022-23. Two universities did not provide data.

The results show the exposure of higher education institutions to the growing financial pressures of the sector.

The redundancies come amid Russell Group cost-cutting across the sector which has seen universities announce academic closures and curtail travel and entertainment as well as cut staff.

The chief executive of the Russell Group, Tim Bradshaw, said the cuts were necessary to make the organizations more sustainable but insisted that the government should do more to help the sector whose research is part of the project. of UK growth and innovation.

“In addition to the measures taken by the universities, we need the government to help maintain a sustainable system to help finance higher education,” he said.

Vivienne Stern, chief executive of Universities UK, the main representation group, said the tightening of the belt is a sign that institutions are putting their houses in order but are exposing potential risks.

“The danger is that no one is looking at the consequences of this, and the danger is that you can have system-wide problems,” he added.

Repeated layoffs have dampened worker morale, added union advocates. Jo Grady, general secretary of the Association of Universities and Colleges, which represents educators, noted that “annual levels of reorganization and job cuts” have failed to bring stability.

The Department for Education said it was taking “difficult decisions” to stabilize universities at a time when public finances were under pressure, and added that the director of the Office for Students was looking closely at stabilization sector funds.

“While (educational) institutions are autonomous, we intend to restore universities as engines of opportunity, growth and aspiration,” it added.

Paul Kett, PwC’s senior adviser on education, said consolidation of the sector threatens expensive and unpopular courses, like chemistry, while he leads to “cold reasons” that may exist in the delivery.

Stern said the sharp decline in international students – who typically pay up to three times the UK’s annual tuition fee of $9,250 – had blindsided universities before they encouraged international recruitment to cover the fee. a long period of ten years.

Applications for UK study visas have fallen from 474,000 in 2023 to 408,000 in 2024, according to Home Office data, following the first Conservative government’s decision to remove the right to post-graduates bringing family members.

This situation was exacerbated by the financial crisis in Nigeria, an important growth market, and competition from other popular destinations, such as Australia and the US, which are reopening after the Covid-19 pandemic.

Report from the OfS it is estimated that £3.4bn of revenue will be lost across the sector by 2025-26, and around three quarters of universities will be in deficit.

A total of 4,900 employees from 21 Russell Group members received severance payments in 2023-24, more than a fifth from last year. Cardiff, Edinburgh and Glasgow did not provide details of the number of workers receiving the payments.

The club has spent more than £348mn in 2023-24 prices on program cuts since the start of the pandemic, when many international students were barred from travelling.

Nottingham and Newcastle had the biggest increases in payouts, paying around £14mn and around £6mn to ex-employees, respectively – nearly 10 times the previous year.

In Newcastle, layoffs and hiring freezes were accompanied by restrictions on overtime, outside hospitality and travel.

Newcastle has said that its higher spending is related to the closure of the accommodation. Nottingham declined to comment.

Exeter also increased its retirement income significantly to £8.8mn last academic year, up from £1.3mn in 2022-23, blaming frozen tuition fees and falling student numbers they are international.

“At Exeter we have seen these challenges first hand and have taken strong, concerted action across all our operations to ensure we maintain our strong financial position,” a university spokesman added.