**Welsh Universities Not Facing Immediate Closure, But Long-Term Uncertainty Lingers**
Welsh universities remain secure in the near future, with no institutions facing imminent collapse, according to recent assurances from Medr, the public body overseeing post-16 education in Wales. However, sector experts caution that the longer-term outlook for higher education providers is characterised by financial strain and uncertainty, necessitating significant action to safeguard their sustainability.
Speaking to the Senedd’s education committee, Simon Pirotte, chief executive of Medr, provided a measured assessment of the sector’s position. He acknowledged, “There are massive challenges facing the whole of the tertiary sector at the moment.” His comments extended not only to universities, but to schools, further education colleges, apprenticeship providers, and community learning bodies, all of which are experiencing mounting financial pressure.
Medr recently examined the financial health of Welsh universities, finding that while none are at risk of immediate failure, the institutions collectively face a more precarious financial situation than in previous years. The latest figures revealed universities in Wales were running a combined operating deficit of £61 million for 2023-24, a stark reversal from the £21 million surplus recorded in the prior academic year. This significant swing has raised concerns among policymakers and sector leaders alike.
The question of whether these deficits could deepen was put directly to Mr Pirotte by Conservative Member of the Senedd Natasha Asghar. His response was candid: “Yes is the simple answer, but what we don’t know yet is the final impact of the kinds of measures that organisations are taking at the moment.” This uncertainty, he suggested, has spurred universities to take proactive steps now in order to stabilise their financial futures and avert more severe potential difficulties.
During the committee session, Plaid Cymru’s Cefin Campbell sought clarification on how close some institutions might be to the brink of administration, questioning, “How close are we to some sort of meltdown?” Mr Pirotte reiterated that no institutions are in immediate peril, but acknowledged there are serious medium- and longer-term issues. “This is not easy – the reason they are taking the actions they are now is to prevent that falling over further down the line,” he explained.
Across the UK, the landscape is similarly challenging, with nearly 100 institutions announcing restructuring measures, Mr Pirotte noted. He emphasised the necessity for Welsh universities to secure their financial sustainability, which in turn may involve tough decisions on staffing, course provision, and operational priorities. “You have to identify additional sources of income, and if that isn’t possible you have to consider scaling back or stopping certain activities,” he warned, underlining the difficult choices facing educational leaders.
Amongst the main financial pressures are rising staffing costs, with annual pay settlements and increased employer national insurance contributions adding significantly to universities’ expenses. Specifically, Mr Pirotte said the sector saw a £22 million rise from a 2.5% annual pay award, compounded by a £20 million hike due to higher national insurance costs. Teacher pension schemes, particularly impacting four Welsh universities, are expected to add a further £6 million to the annual bill.
In addition, ongoing inflation, soaring energy prices, and heightened cybersecurity risks are putting further strain on budgets. The downturn in international student numbers and the end of EU structural funding have also contributed to the shortfall. Even with tuition fees set to rise to £9,535 a year – an increase projected to generate an extra £36 million – the additional income falls well short of the funding gap, Mr Pirotte warned.
This confluence of factors means that while Welsh universities are out of immediate danger, their long-term viability depends on adaptation, innovation, and potentially difficult restructuring. The challenge now, as set out by sector leaders, is to steer these vital institutions through turbulent financial waters without compromising the quality and accessibility of educational opportunities for students across Wales.