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HEFCE closed at the end of March 2018. The information on this website is historical and is no longer maintained.

Many of HEFCE's functions will be continued by the Office for Students, the new regulator of higher education in England, and Research England, the new council within UK Research and Innovation.

The HEFCE domain - - will continue to function until September 2018. At this point we will close the site entirely and all its information will only be available from the National Web Archive.


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While the projected performance of the sector to 2016-17 is sound overall, this assumes that higher education institutions will achieve their student recruitment targets, and that there will be no further reductions in government funding.

These findings are part of the summary of finances for universities and colleges in a new HEFCE publication, ‘Financial health of the higher education sector: 2013-14 to 2016-17 forecasts’.

Following the Government’s announcement in 2013 that 30,000 additional places would be available in academic year 2014-15, projections show only a small increase in total full-time undergraduate numbers in 2014-15. Greater increases are expected in 2015-16 and 2016-17, reflecting the removal of the student number control from 2015-16, but institutional projections across the forecast period vary a great deal.

The sector expects overseas fee income to rise from £3 billion in 2012-13 to £4.2 billion in 2016-17. However, if the slowdown in the growth in 2012-13 of international full-time undergraduate entrants continues, there is a risk that the sector will be unable to deliver this level of income. This would have a significant adverse impact on the sector’s surplus projections.

In terms of short-term viability, the forecasts show that the sector’s surpluses are sound overall, with operating surpluses ranging between £649 million and £980 million in the forecast period. However, this is against a background of an increasingly competitive environment and reductions in public capital funding.

The sector is planning to invest over £15.2 billion in infrastructure projects during the next four years, an average annual investment of £3,811 million. This is nearly 50 per cent higher than the previous four-year average (2009-10 to 2012-13). These investments will be partially funded by public capital funding for teaching and research. However, such funding is now significantly lower than historical levels, requiring institutions to deploy more of their own resources or raise finance through external borrowing to maintain and enhance their estates. This places greater pressure on institutions to generate higher surpluses to remain sustainable.

Given the current economic environment, the sector is increasingly focused on getting value for money from public funds, and, for the benefit of students, from tuition fees. Our analysis indicates that the sector has made an estimated cumulative saving of £716 million over the last two academic years. This shows that the sector is continuing to deliver substantial value-for-money savings that help to support its current financial position. These will be particularly important given the pension pressures currently faced by the sector.

Professor Madeleine Atkins, HEFCE’s Chief Executive, said:

‘Higher education is vital to economic and social prosperity. In a globally competitive environment, universities and colleges in England must maintain and build on their reputation for excellence in research, teaching and knowledge exchange. It remains crucial to secure long-term financial sustainability and to maintain confidence in the financial health of the sector so as to stimulate increased investment.

‘There is a wide variation in the projected financial performance of institutions, and there are risks that need careful monitoring and mitigation if institutions are to be sustainable in the long term. There is a continuing need to invest in new facilities to support a high-quality experience for students which will in turn require continued government support.’