This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
Date Published: 15 June 2022
Higher education providers face long-term, systemic, pressures on their financial sustainability and viability. The proportion of providers with an in-year deficit has increased in every one of the past four years, from 5% in 2015/16 to 32% in 2019/20. Some providers are heavily reliant on income from overseas students’ fees to cross-subsidise research and other activities, leaving them potentially exposed to significant financial risks should assumptions about future growth in international student numbers prove over-optimistic. In the short term, the higher education sector survived the COVID-19 pandemic because of the resilience of individual providers, financial assistance made available by government, no interruption to income from overseas students as had been feared, and the fact that large-scale tuition-fee refunds were not required. Ongoing financial pressures do, nonetheless, increase the risk of providers failing, closing campuses or courses, reducing the quality of teaching, or limiting access, any of which could adversely affect students. In that context, protections for students, in the event of providers facing financial distress, still need strengthening. We are also concerned that student satisfaction, particularly regarding value for money, has fallen in recent years: in 2021, 33% of students viewed their course as good value for money, with 54% saying it was not.