2025 – the Year of University Scandals

Another Scandal ! Another Scandal ! Another Scandal !

We predict that 2025 will be the Year of Scandals in UK universities. There are a number of reasons.

The regulator of Higher Education is the Office for Students, which employs nearly 800 people. It has created a well paid, comfortable cadre who supposedly act in the public interest. What that public interest is, beyond what is said in the originating statute, is very much left to the Office for Students. Its view appears to be that public interest requires more regulators with high salaries that are very close to university senior management. Despite strong competition from the Water Regulator and the Information Commissioner’s Office, the Office for Students may actually be the UK’s worst regulator of all.

Lack of competent regulation has led to well-publicised financial problems for the UK universities. This is not entirely the fault of universities. Given the mixed funding model imposed by politicians, it was rational to expand international student numbers. However, absence of serious scrutiny and oversight — a persistent problem of the UK’s Higher Education sector — caused widespread over-reliance on this funding stream. The UK universities in the biggest trouble are those with formerly high percentages of international students who can’t now replace those lost fees from other sources. For example, in 2021-2022, Coventry University had 34.6 % of all undergraduates paying overseas tuition fees — a huge amount of money that is now substantially reduced, given diminishing international students numbers.

Universities tried to exert pressure on the Government to allow higher home student fees from their £9,250 level, arguing that fees have not increased since 2017, yet the costs of university education have all risen in line with inflation by ~ 26%. UniversitiesUK ran a major PR campaign before the Autumn 2024 budget trying to persuade the new Labour Government that this was necessary. However, politicians (of all parties) are unwilling to let fees rise by much, as they see this as being unpopular with the electorate. It is well worth remembering that the nearest the Blair Government came to Parliamentary defeat was not over the Iraq War, but over tuition fees in 2004 (won by just 5 votes). And notoriously Nick Clegg nearly exploded the Liberal Democratic Party over a tuition fee U-turn in 2010. Now and in the future, any tuition fee increase will likely be very modest.

So, many (perhaps all) UK universities are now running an operating deficit, even including the mega-rich like Cambridge. There is no political will to solve the broken funding model and so this crisis can only end in one way. The entire sector now looks like it will contract by 10 to 15% in 2025. So far, 87 of the UK’s universities have announced widespread redundancies, as recorded here by UCU. It is inevitable that the forthcoming year will see some universities go bankrupt. Shared services, mergers, significant job losses, cuts to expensive STEM courses, angry students & staff and retrenchment in research will all loom large in 2025. This will be a grim year, and even the richest will face cuts and freezes. Universities will be continuously in the news, for all the wrong reasons.

The Minister of State for Skills (including HE) is Baroness Jacqui Smith of Malvern. She has not been hugely sympathetic to the plight of the universities. In a written answer to a Parliamentary question, she has stated:

Adapting to the changed context of the HE sector over the next decade will require providers to undertake a more fundamental re-examination of business models and much less wasteful spending. In return for the increased investment we are asking students to make in the sector, we will need to see far greater collaboration across the sector to drive efficiency. We will expect the sector to be significantly more transparent on how it is managing its resources and to be held to account for delivering great value for money for students and the taxpayer.

(Baroness Smith of Malvern, 18th November 2024)

Strong stuff!

So the view of the Minister is clearly that the financial stewardship of universities has been poor. They have mishandled their resources and they do not deliver great value for money for students or taxpayers. This is true (though perhaps a little disingenuous as politicians imposed both the funding model that bred mismanagement and the regulator that failed).

Given the underlying political and media narrative of financial profligacy, there are a number of scandals that could blow up in spectacular fashion. Let’s give two examples here.

The first is ballooning administrative costs and the pay of senior management, particularly Vice Chancellors, Registrars, Pro-Vice Chancellors and their entourages. The ratio of administrators to academic staff in most UK universities is now 3 to 2 and continues to increase. In Cambridge University, alarmingly, the increase is actually still accelerating. Even more strikingly, the pay of the higher tiers of University senior management has become completely out of control. Let us give one example from Wales. The Welsh public sector Rich list is dominated by Vice Chancellors, who occupy all the top five spots — they are paid more than senior civil servants, police and health board chiefs, council executives and politicians. They are paid very, very much more than the First Minister of Wales.

The argument for high pay is that Vice Chancellors and their entourages are running “highly successful businesses” and internationally competitive salaries are needed to recruit top calibre people (much the same argument was used to justify Paula Vennells’ enormous salary at the Post Office). This argument is difficult to maintain given the catastrophe now engulfing UK universities. So, financial profligacy — over-abundant use of first-class air travel and 5* hotels by Vice Chancellors, wasteful parties with drink and hand-rolled sushi bars, highly paid administrators doing nothing very vital such as vlogging about crinkly careers — is one likely scandal.

The second is poor staff relations. Bullying, discrimination, victimization and harassment are widespread in universities. This generates several thousands of settlements across the sector each year. Some of these relate to very serious allegations of sexual misconduct, health and safety emergencies or violations of the protection of whistleblowers. There is frequent use of non-disclosure agreements (NDAs) — which have only been banned in a very limited number of circumstances.

As a public body, each University should really be compelled to disclose how misconduct claims break down into Employment Tribunal, County Court, High Court, how much money they spend in legal fees, and which lawyers or law firms they use. However, the costs of all this, both internally in terms of University legal and HR services personnel and externally in the form of barristers, lawyers and legal settlements, are shrouded in darkness. There is historical information from the Guardian in 2019 that suggests it is of the order of £100 million across the HE sector. The 21 Group attempted to update the figures, taking into account inflation and internal costs, here. We found that the annual bill for all UK universities is now likely to be at least £340 million or about £2.3 million per university. This is an average and the larger universities are much more than this. This obviously falls into Baroness Smith’s category of “poor value for money for students and the taxpayer“. A high profile legal case — and the 21 Group knows of several serious cases pending against a number of Russell Group universities — is another likely scandal.

If the Post Office, the Church of England, the Vatican, the NHS, MPs and the police force have all faced major scandals, why should universities be any different?

Their time has come.