Funding and financial sustainability

The sector is currently in reasonable financial health with sound surplus levels, good cash balances and healthy reserves. However, there is wide variation in the financial performance and health of different institutions, and some institutions will face difficulties if they experience repeated falls in student recruitment. 

The Government’s budget

Lower than anticipated recruitment in 2012-13 will ease pressure on the Government’s student support budget.

This could change  in future years depending on how many students are recruited, how many take up loans, and whether institutions increase their fees – for example, we are already seeing average fee levels and numbers of applications rise for 2013-14.

Changes in estimated average fee (after waivers) between 2012 and 2013

Financial health of the sector

There is no immediate risk to the overall financial health of higher education institutions in England.

However, the funding reforms, coupled with recruitment shortfalls in 2012-13, have meant there is wide variation in the financial performance and health of different institutions.