When the University of Nottingham shut down its music and languages department in early October, resulting in more than 500 job losses, it blamed weak enrolment and a “challenging international student recruitment environment”.
The Midlands-based university — which had fallen into a deficit of £76.8m in 2024-2025 from a surplus of £220.7m only a year ago — is far from being alone to face massive losses.
One-third of all higher education institutions in the UK are in deficit. The number might rise to almost half by the 2025-2026 academic year, according to a regulatory body if proactive action isn’t taken.
A combination of factors, including demographics, regulation, competition, and politics, is responsible for the financial woes of UK universities.
Domestic challenges
It costs around £12,000 a year on average to teach a university student, according to a Department for Education report. And a university gets a maximum of £9,535 per domestic graduate student.
In 2024, the Labour government led by Keir Starmer raised the capon domestic student fees to £9,535 from the 2025-2026 academic year. But inflation and higher employer national insurance contributions have largely offset the increase. “They’ve actually gone backwards, not forwards, in terms of their...
