UK universities in crisis as centre-left takes power

The UK has voted to end 14 years of Conservative Party-led government, putting in power a centre-left Labour party with a huge parliamentary majority that is expected to seek far more cordial relations with the EU.

But it’s unclear how a cautious, cash-strapped Labour administration will fix a funding crisis that has forced many UK universities to cut back on subjects and fire academics after the Conservative’s controversial tuition fee experiment left some on the brink of bankruptcy.

The incoming government will also face unresolved questions on visa fees for academics, its industrial strategy, and whether to join the next EU research framework programme and Erasmus+ mobility scheme.

“For some institutions there really is a genuine crisis,” said Vivienne Stern, chief executive of Universities UK, a representative body. “We’re seeing a very large number of universities that have to rapidly reduce their cost base.”

The Office for Students, a regulator, recently found that 40% of universities and other higher education institutions expect to run a loss this financial year, with an “increasing number showing low net cashflow”.

This is a major problem for the entire R&D system, because in the UK, research is more concentrated in universities than in say, France or Germany, which have major networks of research institutes outside the university system. And UK universities typically use tuition fee income from students to subsidise their research. 

Stern’s immediate priority for Labour is to secure guarantees that it will step in to stabilise universities if they go bankrupt or need some kind of managed closure. “You have got to have a safety net,” she said.

For academics in the EU, where universities typically have secure funding from the state, talk of bankruptcies and bailouts in the UK might come as a shock, particularly as the country hosts some of the world’s most prestigious institutions.

“In European terms, this sounds horrifying,” acknowledged Stern.

But below the elite level of Oxford, Cambridge and Imperial College London, for example, financial problems have been brewing for years, and now have erupted into full-scale crisis.

The Conservative-led coalition came into government in 2010 dramatically cutting public spending, and in England and Wales, chose to pass on the costs of university to graduates, tripling tuition fees for UK students to £9,000 a year, triggering furious protests. Scotland, however, effectively kept university free for students, and state funded.

Universities were therefore spared the worst of the public sector cuts, but were thrust into a competitive “market” for fee-paying students, giving them a degree of financial autonomy – and responsibility – all but unheard of in the rest of Europe. Under this system, while there are freedoms, “there’s nobody coming to your rescue,” said Stern.

Toxic fees

However, despite the promise of a market, tuition fees remained such a toxic political issue that the Conservative government kept them largely capped, increasing them only once to £9,250.

Particularly as inflation has rocketed, the value of these fees has eroded, making it increasingly loss-making to teach UK students. “It’s a bit like boiling a frog,” said Stern.

In response, universities cranked up recruitment of students from outside the UK. Here, they could charge much higher fees, trading on the UK’s global reputation for good universities. These students now bring in almost as much money as those from the UK.

But this recruitment has clashed with an increasingly anti-immigration Conservative administration, which worried that foreign students were using study as a route to work in the UK or bring over family members.

At the beginning of this year, the government stopped most students bringing dependents, leading to a sharp drop in recruitment, and more financial trouble for universities.

The result is large numbers of universities running major loses and hacking back on courses, academic posts and other projects – and no real plan to fix things.

Labour’s manifesto admits there is a problem. “The current higher education funding settlement does not work for the taxpayer, universities, staff, or students,” it says, but offers no detail on how it will fix the issue.

After 14 years of the Conservative’s tuition fee experiment, Stern thinks it’s time to shift the dial back more towards stable state funding. “We need the public purse to step in,” she said.

But there’s no hope that fees will be scrapped – Labour have ruled this out, given how little money the country has.

Visa hurdles

The Conservative’s anti-migration stance has also damaged the recruitment of academics from overseas, UK universities argue.

A Royal Society analysis from earlier this year found immigration costs for researchers and students were six to eight times higher than in comparable countries like the US, Japan and Germany, and had more than doubled since 2019. A dedicated visa for researchers costs £5,891, for example. 

This has compounded the problem of Brexit, which made it much harder for EU researchers to move to the UK, as it stripped them of the right to relocate visa-free.

“The next government should aim to make the UK the best place in the world to do science,” said Martin Smith, head of the policy lab at the Wellcome Trust.

“This means committing to long-term public funding for research institutions and infrastructure, reducing up-front costs for international visas, and supporting research within the NHS,” he said.

Labour, trying not to say anything controversial as they attempt to carry a huge polling lead to election day – dubbed their “Ming vase strategy” – have not made any noises either way on visa fees. For Stern, this is good news, as it gives them freedom to reduce academic visa fees when in power.

R&D plans

There’s more detail – if only a bit - in the Labour manifesto on how it wants to reform the UK’s wider R&D system.

The party says it will introduce a “new industrial strategy” taking a “sectoral approach and be clear-eyed about where the UK enjoys advantages over other countries.” One of these is life sciences, another is green technologies.

Labour will also bring in what it calls a “Regulatory Innovation Office”, which is designed to bring together existing regulators to make sure they more speedily adapt to technological change.

A £7.3 billion national wealth fund will plough investment into areas like green hydrogen, industrial clusters and carbon capture.

There’s also the promise of ten-year budget cycles for “R&D institutions”, giving them more planning certainty to better allow “meaningful partnerships with industry”. But there’s still no clarity on exactly which bodies would get these new, long-term budgets.

“[Labour is] also looking to stimulate private sector investment in key sectors and infrastructure so again we can assume that UKRI [the country’s main research funder], Innovate UK and universities will play a role,” said Andy Westwood, a public policy professor at  Manchester University.

Framework programme 10

Last September, London and Brussels at long last struck a deal for the UK to associate to Horizon Europe, ending nearly four years of limbo for UK-based researchers stuck outside the programme.

That deal was made under the outgoing pro-Brexit Conservative government, and with Labour signalling it wants warmer relations with the EU – although no return to the fold – it seems likely that the new government will want to renew association when framework programme 10 (FP10) starts in 2028.

“I would be reasonably optimistic,” said Stern. “Our expectation is that Labour would want to join FP10”.

Still, the party hasn’t included any guarantees on FP10 in its manifesto, nor have its leaders said anything about joining.

Stern warns the European Commission and member states about being “complacent” that the UK will associate.

It’s still unclear whether, after a three-year absence, UK researchers are back to winning ways in Horizon Europe, raising questions about value for money. And with defence and security research an increasing priority for the EU, the UK could be excluded from an increasing number of sensitive calls that remain reserved for member states.

This could make FP10 association a tough sell in London, especially if public finances are stretched, warns Stern. “We’re not naïve, we know there’s a massive cost involved.”

And despite Labour’s warmer rhetoric towards the EU, there’s no sign yet that it will seek to associate to the Erasmus+ mobility scheme, ditched by the Conservatives after Brexit, despite a campaign by some Labour activists to rejoin.

The Liberal Democrats, a pro-European centre-left third party, have said they want the UK back in Erasmus.

No more culture wars

 Despite this lack of policy certainty, a majority of UK academics will be relieved by Labour’s win. Almost two in three will vote for Labour, and just 4% for the Conservatives, according to a Times Higher Education survey last month.

If the Conservatives have earned researchers’ animosity, it’s in part because the party and its supporters have increasingly used them and their universities as culture-war punching bags, accusing them of brainwashing students, pushing “woke” science, and offering “rip off” degrees.

This line of attack reached its nadir when science secretary Michelle Donelan falsely accused an academic of supporting Hamas in the aftermath of the 7 October 2023 attacks on Israel. Donelan was forced to pay libel damages – and billed the public £34,000 to cover her costs.

Labour have pledged to stop picking fights with academics and universities. “Conservative attacks on our globally respected institutions – universities, courts and the BBC – have undermined our soft power, traditionally a source of great strength, and diminished our influence,” the party says in its manifesto.

Editor’s note: this story has been updated following Labour’s election victory