Nearly 25% of English universities in deficit last year, figures show

Nearly one in four universities in England were in deficit last year, according to an official compilation of data that suggests more financial difficulties could be on the way.

The number of universities in England with operating deficits in 2017-18 increased to 32, compared with 24 the year before and 10 in 2015-16. Across the UK, the number reporting deficits rose to 47, compared with 40 in 2016-17.

The figures come after warnings of the financial challenges facing many British universities, but especially those in England that are dealing with increased competition and rely heavily on undergraduate tuition fees, which could be cut.

Reading University, which was reported recently by the Guardian to have benefited from the sale of land belonging to a separate trust, was among those with deficits higher than 10% of their annual income.

Reading’s income, reported to the Higher Education Statistics Agency, was £317m against total expenditure of £348m.

Other universities in England with large budget deficits included London Metropolitan and Bradford, while Robert Gordon and Queen Margaret in Scotland also posted large deficits.

Soas University of London, seen as being in considerable financial difficulty, reported income of £92m but spending of nearly £95m.

The outlook remains uncertain for many higher education providers, which are anxiously awaiting the results of a review by Philip Augar commissioned by Theresa May a year ago.

Augar’s report is expected to recommend a cut in the headline rate of tuition fees from the current level of £9,250 a year for undergraduates to a figure close to £7,500. If the reduction is not topped up by additional funds from the government, many universities expect to reduce student numbers in courses affected.

Other options include announcing a floor in the qualifications needed to matriculate, such as two or three Ds at A-level or GCSE passes. That would be seen as an attack on university autonomy, and would also mean fewer potential students for some universities.