University Crisis Has Reached "Crunch Point", Says Education Committee Chair
Universities have been trying to find efficiencies as the financial crisis deepens (Alamy)
4 min read
The chair of the education committee, Helen Hayes, has warned that the financial crisis facing universities nationwide has reached a "crunch point."
Hayes, the Labour MP for Dulwich and West Norwood, was also adamant that as the government looks to find savings across the public sector, the Department for Education (DfE) cannot afford further cuts.
The Labour MP told PoliticsHome that the fears over the "precariousness of university finances" are "coming home to roost" amid a growing number of institutions announcing redundancies and cutting courses in a bid to save money.
The chief executive officer of the Office for Students last week told PoliticsHome that the watchdog was braced for cuts creating "cold spots" — parts of the country where certain degree-level subjects are not provided.
Writing for The House this week, Jo Grady, general secretary of the University and College Union, accused the Labour government of "effectively sitting on its hands" while up to 10,000 higher education jobs are at risk.
Rising costs, alongside a fall in income from overseas students and the freezing of tuition fees at £9,250 in 2017, have led to severe financial pressure on the sector.
While Education Secretary Bridget Phillipson recently announced that tuition fees will rise to £9,535 per year in 2025, uncertainties remain about the future of some institutions.
Hayes said her committee was "really concerned" about the situation facing universities, describing it as having reached "crunch point".
"It feels as if what's been feared for a long time in terms of the precariousness of university finances is coming home to roost in the financial decisions that many universities are having to make."
On Friday, she announced that her committee would carry out a deep dive evidence session into the issues facing higher education finances.
While Hayes praised the Labour government's move to raise tuition fees with inflation in 2025, she said that "a fully comprehensive approach to the financial sustainability of universities" is still lacking.
The government will set out its proposals for wider reform of the higher education sector in the coming months, but funding reforms are not expected to be top of the agenda.
On the student experience, Hayes said cost of living pressures were certainly having a significant impact on the quality of life of many students across the country.
Vice-chancellors have increasingly raised concerns over the number of students working 20 hours alongside a full-time degree to have enough money.
Hayes would not be drawn on individual measures when asked whether she would like to see the restoration of the student maintenance grant, which students do not have to pay back.
She admitted, however, that the current situation was "not a very satisfactory" one.
A Department for Education (DfE) spokesperson said: “We will create a secure future for our world-leading universities as engines of opportunity, growth and aspiration, which is why the Office for Students has rightly refocussed on monitoring financial sustainability.
“Whilst institutions are autonomous, this government has taken tough decisions to fix the foundations of higher education and deliver change for students, including lifting the maximum cap on tuition fees.”
Hayes also expressed concern about the state of the early years sector.
The Labour government has pledged to deliver 30 funded hours for eligible working parents with a child from nine months old up to school age from September 2025.
However, childcare providers have raised alarm about the impact of the rise in National Insurance employer contributions announced in the October Budget.
The early years sector has previously warned that the failure to fund private nurseries for Budget measures will cost the average setting an additional £50,000 a year.
Labour MP Hayes said that the sector was in an "incredibly precarious" position and while the government has provided additional money to support the rollout, there is a need for "very careful attention on what's happening in the early years sector at the moment".
She added that ministers must pay attention to whether capacity is there in the sector to meet the commitment that has been made to expand entitlements.
Asked by PoliticsHome if the DfE could afford to make further cuts as the Treasury calls for departments to make efficiencies, Hayes responded "No."
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