Welsh universities ‘lose money on each student’ after funding cut

Every British undergraduate taught in Wales will soon cost their university more money to teach than the money they bring from tuition fees or teaching grants, Cardiff University’s vice-chancellor has warned.

Speaking after the Welsh government announced plans to cut almost £5 million from its 2023-24 higher education budget, Colin Riordan said his university was likely to hit a “tipping point” next year in which not a single undergraduate programme would break even if it had to rely solely on the £9,000 annual tuition fee paid by UK undergraduates.

Courses are able to remain in the black only thanks to international students, who pay higher fees, said Professor Riordan, adding that other universities in Wales faced a similar scenario.

“Earlier this year, the Russell Group released analysis which showed there will not be a single programme covering its costs on domestic fees alone in a few years, but we are ahead of that trend here in Wales because we cannot charge the extra £250 a year that English universities do,” explained Professor Riordan.

“That £250 a year might not sound a lot, but if you consider the tens of thousands of students we’ve taught since 2017 [when the tuition fee cap increased for English universities], then it makes a real difference,” he added.

The cut in central funding from the Welsh government, taking it to £199 million in 2023-24, combined with inflationary pressures meant that all undergraduate courses will become loss-making without support from international students, Professor Riordan said.

“We’ve been hovering about this tipping point for three or four years, but the latest developments will push us over – we cannot cover our costs from home students on any degree programme, let alone the more expensive ones,” he added.

While many UK universities – including Cardiff – had enjoyed increased international enrolments in 2021-22 following the introduction of a two-year post-study work visa and the end of Covid-linked travel restrictions, this upturn could not be relied on indefinitely to subsidise undergraduate courses, insisted Professor Riordan.

“It’s an extremely volatile market which is subject to international events that we cannot control – from changes in the global economy, changes to the policies of sending countries and shifts in domestic visa rules,” said Professor Riordan.

“Most international students come for postgraduate taught master’s, which are only one year long too, so things can shift dramatically very quickly,” he added.

With the current home tuition fee model resulting in net losses for universities, it was essential to have a national conversation about investing more in undergraduate teaching, believed Professor Riordan.

“It is politically impossible for any party to raise tuition fees – if Labour got elected, I can’t see them doing this given their opposition to higher fees over the years, while the Conservatives have also resisted this too,” he said.

“We can have either fewer students, a decline in the quality of teaching or more investment in teaching our own students, and I’m in favour of the latter.”

jack.grove@timeshighereducation.com