Can you explain the financial crisis in universities to me as if I’m a 6 year old?

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We are currently living in Ireland but may return to the UK once teenage DC are finished school. They are considering going to uni in the UK and I am aware in a basic way that many universities have financial issues, are cutting staff and courses etc. I don’t feel I have a decent grasp of why this is or what it would mean in reality if they studied there. In Ireland I am not aware of similar issues but there is a much smaller number of universities to choose from and admission to many courses is highly competitive due to the numbers applying rather than the demands of courses themselves. My DC would have more options to choose from in the UK, which is a major reason for considering it. Can anyone explain the situation to me in a simple way?

Not as many babies being born meant that universities dont have as many students applying to them anymore. So they are not getting as much in fees. Also the fees that they do get have only gone up about £500 in the last 10 years, but the cost of everything else (costs like electricity and wages) have gone up a lot lot more than that. So now universities dont have enough money to pay their bills anymore, they cant get anymore students, they cant increase their fees, so all they can do is reduce the services they offer to students. And the more they reduce the services, the less students want to choose that uni over one that offers more. Its a downwards spiral that they cant do anything about.

@rachelhere That almost certainly won't be on the universities dime; it might be costed into a research grant. I'm a lecturer and my personal research budget is £500 pa. That will just about (maybe) pay for a conference in Europe. It won't take me to the US, where I actually need to go because of my work. These are events I need to attend to publicise my own work and learn about the latest work in my field; I am supposed to do them as part of my job. I pay out of pocket to attend some. So I effectively pay to do my job because if I don't, I'm more at risk when the axe falls - and because I think the work is important, valuable and no one else is doing what I'm doing.

OP, another reason is the removal of the recruitment cap on numbers. When you were at uni, each intrusion could recruit a certain number of students per course and there were financial penalties for over recruiting. When this was removed, Russell Group unis expanded massively, and borrowed for huge capital projects to match and keep up recruitment. Now we're in a demographic dip, plus inflation, the banks behind their loans getting twitchy - there's huge budget gaps. Both RGs and plate glass, post 92 etc institutions they poached from are now in a total mess.

I've just been at an event with colleagues from all over the country. It's grim. So many of them currently at risk of redundancy, all excellent teachers and researchers whose work helps us better understand the world we live in now. And RG colleagues, too. Students will suffer, teaching will be poorer. Institutions will fold. RG places probably won't close but the student experience will be worse than 5 years ago.

changes to international students have made the UK less attractive and international students are how universities cover their costs, as has Brexit and our political discourse in recent years.

heavy over reliance on Chinese students across the sector which is now a weaker market as China has built many excellent universities, recruiting staff internationally

universities in unpopular places for international students are doing particularly badly

some universities have had colossally bad financial management

plus inflation, cost of living, tax changes, costly over-regulation and a weird relationship
with public funding that means they can’t charge real costs because the government can’t afford the student loan book

HOWEVER, there’s potential to pick up students who no longer want to go to America and also American students who want to get the hell out for 4 years. Which is good.

I think Higher Education has been underfunded for years even before tuition fees. As others have said, international student fees helped to somewhat offset this, but the numbers have declined. That's causing a lot of the problems now. Along with national insurance rises, cost of electricity etc. Anything that makes our day-to-day costs more, means the universities day-to-day costs are also more.

But something other people haven't mentioned is research grants. Most universities do a lot of research (lecturers don't just teach, that's a small part of their job). These research grants are really competitive, only about 10% of proposals are funded. If you are succesful your research grant is funded at 80% of what it costs you, but you're still expected to do 100% of the research. So universities are meant to magically find the remaining 20% of the costs. (And you can't over-exagerate your costs in your proposal to cover it!)

“My neighbour’s friend’s mum saw a thing on her gym buddy’s book club facebook page that suggests that lecturers don’t work as hard as people going down a mine” is not a robust analysis of the issues facing higher education institutions.

Thanks so much to you all for taking the time to reply! I had not realised the extent to which universities were more government funded back in the day and that the current level of fees is not covering costs.

This is a really good explanation. Just to add that as universities are responsible for around 50% of young adults, they are picking up the pieces of austerity and broken mental health, SEND and education systems.

Universities are spending £m on supporting students, when really this should be paid for elsewhere. (Universities will always have a duty of care, but shouldn't be the ones footing the bill for providing what is essentially healthcare.)

Didn’t the government also limit the number of possible students at one point, thereby limiting their contribution?

I work for a RG uni. I discovered that the Gov gives unis £250 per head for UK fee students on non science/med/engineering courses per year. And has curtailed the max fees the unis can charge these students for years.

Even a 6 year old could see that's not really enough, esp as fees have not rise for years whilst costs have rocketed hugely.

Something else it’s important to check you may not have considered - a friend of mine at uni (this was around 2000), was born in England, the family moved to Ireland when she was in primary and moved back to England before she went to uni. She discovered she struggled to get any student finance. UK student loans company wouldn’t give her a loan because she hadn’t lived in the UK for a long time. She didn’t meet criteria as an international student because her current address was in the UK. I think she ended up getting a bank loan with a high interest rate. I’d definitely suggest checking this possible issue out before you move.

The way it works is he is paid a salary by the university, but he must attract grants in order to pay for research and staff. Likely he is managing several large grants. When I say 'managing', I mean there is an administrator and they collaborate on how the money is deployed, with many stipulations which were part of the grant application.

His university will be judging his success or failure based on how many of these grants he can get, how big they are, and their 'impact' - so he has to travel to collaborate with others so they can apply for grants as a team, he has to travel to the places where the impact may be most useful. Whatever detractors say, research which moves us forward is still an international activity. In Britain there's still a whiff of colonialism about it too.

The point is, it is not the university's dime that's paying for the travel. We as taxpayers do not generally pay for travel and accommodation. Grants pay for the rooms that are in use, even! They pay for equipment. We aren't even paying the salaries of a lot of research staff. It all comes from grants with various foundations (and yes some government research councils as well).

People have less than zero idea quite often of how academia is organised. Please don't believe the Daily Mail, Reform etc. University staff have been cut to the bone, actually, and where you might have got subsidised accommodation and a secretary and long holidays, that was about 70 years ago and it all gone, replaced by a far more corporate culture. Fair enough in some ways but it really is not a dreamworld by any means.