Universities Facing Financial Uncertainty Over ‘Substantial Cash Hole’ in Wales

Some Welsh universities could be facing a “substantial financial hole” in their finances, an economist and academic has said.

Professor Dylan Jones-Evans said “a combination of factors meant a bleak future if they failed to recruit enough students before the start of the new academic year in September”.

The Welsh Government said it “recognising the financial pressures facing universities” and was increasing tuition fees in Wales to £9,250.

Professor Jones-Evans said “some universities had been affected by an over-reliance on recruiting overseas students, whose numbers had fallen sharply in recent years due to changes to student visas”.

He told Newyddion S4C: “In recent years, there has been a clear strategy for international students, which makes sense when you pay around twice as much as domestic students.

“The problem now is that source of funding has been closed off due to changes in visa rules – that will certainly leave a significant fiscal deficit in the coming year.” ”

Professor Jones-Evans added that recruiting enough students in the coming weeks could be crucial.

“One of the challenges facing Wales is that Cardiff University is a higher-fee university,” he said.

“The real challenge for universities that don’t have enough money in the bank is how much money they can make in September, which depends on domestic and international students.”

He said some Welsh universities could face a “serious cash shortfall” if they failed to recruit enough students in line with their forecasts.

Gwen Williams, deputy director of Universities Wales, agreed it was a difficult time.

“University income has not increased with inflation for some time and our funding system is not covering the full cost of educating local students or conducting research,” she said.

“We absolutely need to think about a more sustainable future funding model for the sector and that is a matter for the Welsh Government.”

A Welsh Government spokesperson said in a statement: “We are aware of the financial pressures facing higher education institutions in Wales and across the UK and the Cabinet Secretary regularly consults with industry leaders on this.

“We have increased the fee cap for full-time courses in Wales to £9,250 to reflect the increase in the cost of delivering courses at universities.

“Because universities are independent organisations, they manage their budgets in different ways.

“The Higher Education and Research Councils are looking closely at the financial health of the higher education sector,” she added.

“We recognise the important role that universities play beyond academic and commercial activities – contributing to local communities and supporting people across Wales through partnerships and projects.”