England’s first student cohort paying £9k a year provide sector with surplus worth £1.8bn

As the UK’s first ream of students paying £9,000 a year for their degree embark on graduate life, Great Britain’s universities revel in a surplus worth almost £1.8 billion.

Earnings from England’s universities outweighed those from other UK regions, with the University of Oxford alone bringing in more than Scotland’s entire higher education sector.

The UK’s Higher Education Statistics Agency (HESA) highlighted this year’s record surplus in its most recent figures, noting that the profit follows two previous years of record-breaking excesses for English universities, encouraged by officials from the Higher Education Funding Council for England (HEFC) to prevent shortages of higher education funding occurring in the future.

This year, Oxford’s surplus reached £191 million, the highest amount brought in by any British university, according to HESA’s figures. The surplus of Scotland’s entire university system amounted to £166 million, £100 million of which was earned by the Universities of Glasgow and Edinburgh alone.

Oxford was followed by the Imperial College London, whose total profits last year reached £143 million, and with a surplus worth £65 million, Liverpool University was the third highest earner.

Both income and expenditure have increased across the sector over the last three years, but there were eight UK universities that saw their income fall over the same period, including: the University of Bedfordshire, Cumbria, Liverpool Hope, Middlesex, Glyndwr, the University of Wales Trinity St David and Abertay Dundee.

International students contributed £4.2 billion to UK higher education in the academic year 2014-15, representing 13 percent of the total generated income.

This year’s financial data represents all three years of the first undergraduate population to fork out the annual £9k tuition fee since the rise in 2012.

Though the tuition fee hike has significantly boosted earnings for British higher education institutions, it has had a detrimental effect on numbers of part-time and mature students submitting applications. The Open University for example, announced a deficit worth £7 million and a considerable drop in enrolments.

Gordon Marsden, Labour’s shadow minister for higher education and former Open University tutor, said: “The Open University announcement merely underlines the very fragile and worrying situation for lifelong learning in general and part-time higher education learning in particular.

“Drops in student numbers and the Open University’s losses are simply further evidence of the neglect and dire straits currently facing adult and part-time learners in higher education.”

In the past academic year alone, English universities spent £25.9 billion overall, seeing a total return of £27.7 billion, which amounts to a profit of £1.8 billion for academic year 2014-15, well above the total earnings for 2013-14 and 2012-13, which stood at £1.1 billion.

“UK universities do not make a profit. Any income they receive is spent on day-to-day activities, or reinvested for the future,” said a representative of Universities UK.

“A surplus is essential for universities to manage short-term fluctuations in income, for unanticipated changes to student numbers or unexpected costs. It is also needed for reinvestment in future capacity, including investment in new teaching spaces and research facilities, and refurbishment of existing buildings.”

England’s 2012 tuition fee hike has seen the income brought in from regional universities significantly increase. Scotland and Wales have not seen the same effect because both governments of these regions decided not to increase university fees for all prospective students.

In England, tuition fees and similar education income has risen from £10bn in 2012-13 to close to £14bn in 2014-15, while spending on staff rose from £12.7bn to £14bn two years later.

While the tuition fee hike continues to benefit English universities, what lies in store for the higher education sectors of England’s UK counterparts, and what steps should be taken to boost part-time and mature student enrolments throughout higher education in the UK?

Additional reporting by The Guardian.

Image via Pixabay.

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