You need cookies enabled

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 The information on this website is historical and is no longer maintained.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.


You need cookies enabled

However, there continues to be wide variation in the financial performance of individual institutions [Note 1]. Institutions are also increasingly relying on higher borrowing to pay for their capital programmes. Without increased surpluses and continued government support, there is a risk that they will be unable to deliver the scale of investment required to meet rising student demands, build capacity and remain internationally competitive.

The sector reported overall operating surpluses of £992 million (3.9 per cent of income) which were consistent with the level reported for 2012-13 (also 3.9 per cent of income). The sector invested substantially in its capital infrastructure in 2013-14, which at £3,250 million represents a significant increase (23 per cent) compared with 2012-13. To fund this level of investment, the sector used £1,552 million from its own cash reserves and borrowed an additional £501 million.

The latest financial records show that the sector continues to make efficiencies, with an estimated cumulative saving of £1.1 billion reported over the last three years. These savings have helped support the current financial performance of the sector. It will be important to sustain this efficiency drive in light of rising pension costs and a rise in the costs of operating in the new competitive environment.

Although the overall financial position is currently stable, sector financial forecasts project lower surpluses, a fall in cash levels and a rise in borrowing [Note 2]. This signals a trajectory that is not sustainable in the long term.

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

‘Universities and colleges in England have a reputation for world-leading excellence in research, teaching and knowledge exchange. In order to sustain and build on this reputation, they need to continue to invest in staff and infrastructure, and provide a high-quality experience for students. 

‘The sector has made significant efficiency savings, and taken a considered and careful approach to financial management during a period of ongoing change in higher education.

‘While short-term health is not an immediate concern, future uncertainties and developments present considerable challenges for individual institutions and for the sector as a whole.

‘It remains crucial to secure long-term financial sustainability and maintain confidence in the financial health of the sector in order to stimulate increased investment. This will require continued support from government.’


  1. See ‘Financial health of the higher education sector: Financial results and TRAC outcomes 2013-14’.
  2. See ‘Financial health of the higher education sector: 2013-14 to 2016-17 forecasts’.