Solving university crisis is key to Labour delivering economic growth

‘As the Labour Party sets about ‘taking the brakes off Britain’, it shouldn’t ignore one of the UK’s potential drivers of growth – higher education,’ says Michael Rainsford, Director of StuRents. In The Standard, he explored why he feels that, without significant investment into universities and university towns, many of the UK’s leading educational institutions will decline in the global rankings. 

According to London Economics, UK universities account for around £130 billion worth of economic impact and over 768,000 full-time jobs. However, concerningly, the UK’s reputation as an international “hub for education” is currently threatened, as 58% of British universities declined in the QS World University Rankings this year, while only 22% rose. 

Additionally, research conducted earlier this year by PwC and Universities UK warned that 40% of universities will experience budget deficits in 2023/24.

Underfunding remains a huge problem for UK higher education, partially due to tuition fees remaining unchanged since 2017 while inflation has seen a huge increase, and partially due to a significant lack of government investment in the sector. 

International students’ fees have also dropped, which is estimated to have caused a £1.2billion loss of income for universities in the past year. As a result, universities are having to turn to job cuts and course closures to try and compensate for financial losses.

The student housing crisis has not helped matters. StuRents data suggests that by 2026, the UK will have a shortage of 620,000 beds. The continued imbalance between supply and demand means that student rents are set to see an increase of 10% like-on-like growth from 2023.

While domestic students struggle to afford these higher rents, international students may begin to look to study in countries where they can make their money go further, as suggested by the fact that student visas are down 16% year-on-year. 

Allowing this to go on will not only have significant implications for the UK’s higher education sector, but also for smaller town centres and regional economies which are heavily reliant on student populations, contributing over £2bn in economic output to every region in the UK.

Labour has asserted its commitment to prioritising growth, clean energy, and opportunity in a mission to ‘rebuild Britain’ - and, certainly, these are all areas in which higher education has a key role to play. 

Government investment into UK universities is key if we are to see results before it is too late, Michael Rainsford argues. 

‘This means working out a fair funding model so that institutions don’t have to cut back on staff or research. It must also include a focus on student housing, to ensure that university towns are enjoyable and affordable places to live,’ he says.

‘We also need a data-led national student accommodation strategy that considers regional demand for university housing and provides a framework for local authorities to bolster housing development.’

Read Michael Rainsford’s full piece on The Standard.