Universities facing 'massive' financial challenges

Universities in Wales face "massive" financial challenges but none are at risk of going bust in the next 12 months, the head of the body which funds and regulates them has said.

Medr chief executive Simon Pirotte said the eight institutions reached a total deficit of £77m for 2023-24, compared to a £21m surplus the previous year.

But planning for their future was "extremely difficult" in a "volatile and changing environment", he warned Senedd members.

UK universities face higher costs that include staff pay increases, a rise in employer National Insurance contributions and energy prices whilst the number of higher paying international students has fallen, said Mr Pirotte.

The £77m figure includes one-off restructuring costs.

A rise in the tuition fee cap for home undergraduates to £9,535 for 2025-26, after being frozen at £9,000 between 2012 and 2024, was not enough to cover cost pressures, said Mr Pirotte.

Restructuring plans, including university-wide voluntary redundancies schemes, have been announced by Aberystwyth, Bangor, Cardiff, Cardiff Metropolitan, Swansea, and the University of South Wales.

More limited plans have also been announced by University of Wales: Trinity Saint David.

In a document submitted to the Senedd's education committee, Medr says a "number of institutions have significant transformation activities to implement in order to secure their longer-term financial sustainability".

However Mr Pirotte told the committee: "We do not believe that any institution in Wales is at risk of failure in the immediate short term."

Medr, he said, was "working closely with institutions to understand their medium and long-term forecasts and plans".

"I think the future is really challenging. That's why institutions are addressing the issue now because they have to," he said.

The difficult decisions universities were making were to "prevent that falling over of a university further down the line".

Medr chief operating officer James Owen said an additional £28.5m the Welsh government announced for universities in February for the current year had been welcomed.