A Double Blow: The UK’s Higher Education Sector in Turmoil

With imminent redundancies looming across higher education institutions in the UK, we are left wondering how it went so wrong for the sector? In this piece, we identify two key factors that we argue led the HE sector to the brink of despair: specifically the marketisation of the HE sector and external economic turbulence. We also argue that this pivotal moment will leave a lasting legacy.

Over the past few decades, the marketisation of HE has resulted in its commodification, with universities increasingly acting as business-like entities. The framing of university degrees as commercial goods in the UK began in 1998, when Tony Blair’s government introduced means-tested tuition fees of £1,000 for students in England and Wales. In 2006, universities were allowed to set their own fee rate up to a maximum of £3,000 a year and by 2012, this upper limit had tripled to £9,000 (Lewis, Bolton and Wilson, 2024). This rise in fees turned HE into a competitive marketplace, positioning students as customers and universities as competitive service providers.

This trend was further exacerbated by the removal of student recruitment caps during the 2015-16 academic year, which allowed universities to admit unrestricted numbers of students. By enabling students to compete for student enrollment, the government has further embedded market logic into the sector, encouraging institutions to operate less like public bodies and more like private enterprises responding to ‘consumer’ demand (Molesworth, Nixon and Scullion, 2009). This shift is directly tied to the altered HE funding model, in which tuition fees – funded largely by government loans – became the main source of income. For example, in 2005-6 fees accounted for just 24 percent of university income, having since risen to over 50 percent in 2019-20. Funding body grants by contrast have declined from 39 percent in 2005-06 to just 11 percent by 2023-24 (Bolton and Lewis, 2025).

Like many fairy tales of the neoliberal era, the changing nature of HE financing has had a detrimental outcome, proving to be both unsustainable and unable to withstand external turbulence. Events such as the COVID-19 pandemic, international geo-political turmoil, coupled with shortcomings in domestic policies triggering unprecedented inflation and soaring utility prices, has placed many major educational institutions in rather precarious financial positions. Such developments have also impacted the already limited public funding available to HE providers, particularly the indirect support provided through student loans for tuition fees. Due to inflation, the real value of student loans has declined by 30 percent since 2012, and maintenance loans have decreased by 10 percent since 2021 (Wyness and Murphy 2024). This reduction in financial support has led to significant hardship among students, affecting their ability to engage fully in academic courses, participate in university life and successfully complete their degrees (Atas and Dabrowski 2024). A study by The Sutton Trust (2023) revealed that ‘one in four students regularly go without food and other necessities due to cost’ highlighting the severe impact of rising living expenses on student wellbeing. To make matters worse, the global instability – coupled with hostile UK migration policies – has negatively impacted the intake of international students. Given the sector’s heavy reliance on international student fees, which generates around £12 billion per year and accounts for 23 percent of the total university income (Bolton, Lewis and Gower 2025), the 16 percent reduction in international students in the 2024-2025 academic year (OfS, 2025) played a significant role in pushing a number of large universities to the brink of bankruptcy.  

As of 2025, universities collectively hold approximately £9.5 billion in debt, with 60 percent operating at a loss (Bloomberg, 2025). According to a report from the Office for Students, four in 10 universities in England are expected to be in a financial deficit by the end of July. While some universities have chosen to sell assets, others appear to self-sabotage by compromising teaching and research quality and penalizing their academic staff and students (OfS, 2025). Compulsory redundancies, course closures, departmental closures and reduced investment in research has spread like wildfire across the UK (UUK, 2025). It has been estimated that nearly 9000 people across 165 institutions have been affected by the compulsory redundancies (Harrison and Harvie, 2025). However, when voluntary schemes and hiring freezes are taken into account, the total number of roles impacted could be twice as high as earlier estimates (Roswell, 2025).

What we are currently witnessing is a barbaric dismantling of the intellectual fabric of the HE sector. Universities are meant to nurture minds, serve as temples of enlightenment and progress, and stand as strongholds of critical thinking – qualities that can only be fostered by skilled and committed professionals. HE institutions were not intended to become factory conveyor belts where knowledge is shaped by scarcity, market efficiency, and an endless pressure to deliver more with less. Universities often entice students with promises of high-quality research, teaching and support – services that cannot be delivered while purging academics and expecting the remaining staff to absorb additional workloads, stay motivated, and still produce excellent results. In reality, academics are struggling with unmanageable workloads while becoming increasingly demoralized by the devaluation of their expertise and a diminishing sense of purpose and worth within the sector.

In highlighting the impact of this fallout on both staff and students, we call for an immediate response to save a sector that is estimated to have an annual economic impact of approximately £265bn (London Economics, 2024). What happens to universities now will have a long-term effect not only on highly skilled academics and staff across the country who have had the rug pulled from under their feet, but also current and prospective students who may be deprived the opportunity to experience higher education. We believe that the choices made in this pivotal point in history, and the direction taken by the HE sector, will not only shape individual lives, but also the future of our society and the advancement of knowledge in the UK and around the world. We are witnessing it happening already: once regarded as one of the most desirable places to obtain a university education, Britain is rapidly losing its former glory.

References

Atas, N., and Dabrowski, V. (2024) HE Students: The neglected voices of the cost of living crisis – everyday society, The British Sociological Association. Available at: https://es.britsoc.co.uk/he-students-the-neglected-voices-of-the-cost-of-living-crisis/  (Accessed: 20 July 2025).

Bloomberg (2025) Lenders risk pain from UK universities’ £9.5 billion debt burden – Bloomberg. Available at: https://www.bloomberg.com/news/articles/2025-03-28/lenders-risk-pain-from-uk-universities-9-5-billion-debt-burden (Accessed: 29 July 2025).

Bolton, P. and Lewis, J. (2025) Higher education finances and funding in England – House of Commons Library. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-10037/  (Accessed: 29 July 2025).

Bolton, P., Lewis, J. and Gower, M. (2025) International students in UK higher education – house of commons library. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-7976/ (Accessed: 14 July 2025).

Harrison, R. and Harvie, D. (2025) ‘Universities Degraded: Staff Experiences & Employer Practices of Redundancies in UK Higher Education’. Zenodo. doi: 10.5281/zenodo.15638922.

Lewis, J., Bolton, P. and Wilson, S. (2024) Tuition fees in England: History, debates, and international comparisons – House of Commons Library. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-10155/ (Accessed: 21 July 2025). 

London Economics (2024) The economic impact of higher education teaching, … Available at: https://www.universitiesuk.ac.uk/sites/default/files/field/downloads/2024-09/LE-UUK-Impact-of-university-TL-and-RI-Final-Report.pdf  (Accessed: 8 July 2025).

Molesworth, M., Nixon, E., & Scullion, R. (2009). Having, being and higher education: the marketisation of the university and the transformation of the student into consumer. Teaching in Higher Education, 14(3), 277–287. https://doi.org/10.1080/13562510902898841

Office for Students (2025) Financial Sustainability of higher education providers in England: 2025, Office for Students. Available at: https://www.officeforstudents.org.uk/publications/financial-sustainability-of-higher-education-providers-in-england-2025/  (Accessed: 5 July 2025).

Rowsell, J. (2025) UK university job cuts put at 20,000 after full impact ‘hidden’, Times Higher Education (THE). Available at: https://www.timeshighereducation.com/news/uk-university-job-cuts-put-20000-after-full-impact-hidden (Accessed: 20 July 2025).

The Sutton Trust (2024) Cost of living and university students, The Sutton Trust. Available at: https://www.suttontrust.com/our-research/cost-of-living-and-university-students-2023/  (Accessed: 1 July 2025).

Universities UK (2025) Universities grip financial crisis – but at what cost to the nation? Available at: https://www.universitiesuk.ac.uk/what-we-do/creating-voice-our-members/media-releases/universities-grip-financial-crisis-what  (Accessed: 19 July 2025).

Wyness, G. and Murphy, R. (2024) UK Higher Education Finance: What’s the problem and what can be done?, Economics Observatory. Available at: https://www.economicsobservatory.com/uk-higher-education-finance-whats-the-problem-and-what-can-be-done (Accessed: 20 July 2025).