Russell Group warns of long-term squeeze on UK skills pipeline

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05 May 2022

Leading universities today (5 May 2022) urged the Government to prioritise long term sustainable funding for higher education to ensure high-quality teaching provision can continue to be responsive to the country’s skills needs, in its submission to DfE’s Higher Education reform consultation.

The Russell Group, which represents 24 leading UK universities, estimates that as a result of rising student demand and rapidly increasing costs alongside frozen tuition fees up to 2024/25, the average deficit per UK undergraduate taught is set to more than double from £1,750 in 2021/22 to around £4,000 in 2024/25, with deficits across all subjects.

In response, the Russell Group is calling on Government to work with the sector to develop a new funding formula from 2024/25 that will maintain the quality of Britain’s world leading higher education sector so it can deliver the best experience for students while ensuring a fair deal for the public purse. A sustainable funding settlement will also support universities to deliver on Government ambitions such as the Lifelong Loan Entitlement.

Additional Government investment of £300m over three years into the Strategic Priorities Grant (SPG) as well as the maintenance of the capital budget, with a particular focus on subjects with the highest teaching costs, such as medicine and engineering, have been welcomed by the sector. However, even with the additional grant funding, unless steps are taken the per-student funding (the total amount per student provided by tuition fees and Government grants) available to deliver teaching across all subjects will decline significantly by 2024-25.

Universities have already and will continue to take steps to mitigate the impact of deficits on the quality of teaching and support for students, working more efficiently and looking for new ways to generate other income.

However, the Russell Group has said a continued decline in per-student funding will start to impact on investment in teaching and ultimately affect quality and choice for students in the long term, potentially impacting on class sizes, staff-student ratios, investment in practical teaching and infrastructure, module choice and intake onto the courses with the largest deficits. It could also have knock-on impacts on the graduate pipeline for the economy, hindering universities’ ability to innovate and respond to skills gaps, and disrupting efforts to support regional economic growth.

Dr Tim Bradshaw, Chief Executive of the Russell Group, said:

“We understand the challenges Government faces in balancing the public finances so welcome recent investment in high-cost subjects and capital funding. However, with tuition fees frozen for another two years, and costs and student demand rising, the pressure on funding for teaching will grow.

“Universities will continue to work hard and find ways of reducing that pressure so they can provide the best possible student experience, but if unaddressed over the long term this will inevitably affect the range and quality of courses that can be offered to students at a time when we need a breadth of high-level skills to drive a sustainable recovery.

“There is an opportunity over the next two years for the sector and Government to come together and look at a new funding formula that will protect that pipeline of skills and high-quality education for the benefit of students and the wider UK economy and society.”

You can find below the Russell Group response to the Government's consultation on HE reform, as well as a more detailed briefing that sets out our analysis of university teaching deficits.