Recommendation 16

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)