Select committee: Education Committee
Conclusion 16
9th Report - Higher Education and Funding: Threat of Insolvency and International Students
Published 12 May 2026
Addressed to Department for Education
Education Committee Higher Education and Funding: Threat of Insolvency and International Students All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The higher education sector is under unprecedented financial pressure, with the Office for Students reporting that 45% of higher education providers could face a deficit in 2025–26 without mitigating action. We have heard that these financial pressures vary amongst different types of HE provider, but stem from the freezing of UK undergraduate tuition fees, for some institutions the lifting of the cap on student numbers, reductions in research and teaching grant funding, the impact of higher interest rates on the cost of borrowing, and recent changes in both international student numbers and countries of origins. Concerns were also raised about the quality of governance at some HE institutions, the impact of increases in national insurance employer contributions and Teachers Pension Scheme contributions, and regulatory costs. (Conclusion, Paragraph 102)
From: Education Committee, 9th Report - Higher Education and Funding: Threat of Insolvency and International Students (HC 807), 12 May 2026
Government response
The government responded to the whole report on 22 July 2026 (deadline 12 July 2026).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the report and sets out its position on each recommendation, accepting a few, partially accepting several, rejecting others and stating that many are covered by "plans already in place".
- On insolvency, the government rejects a bespoke special administration regime, saying it is "not currently persuaded" the case has been "sufficiently demonstrated", and that intervention is not the default response.
- On teachers' pensions, it rejects the recommendation and does not consider additional financial support for higher education providers in England "appropriate", but says HM Treasury has confirmed the employer contribution rate will fall from 28.68% to 17.5% from April 2027, fixed for four years.
- It declines to commit to a timeline for reaching 80% cost recovery across all research funders, because the main drivers are "the decisions of independent and autonomous institutions".
- On international students, it says the levy will not start until 2028/29, with an allowance for the first 220 international students per year, and that maintenance grants of up to £1,000 will return from 2028/2029.