Financial Sustainability of the UK Higher Education sector, January 2024

Student apartment building

Higher Education institutions in the UK are facing increasing financial pressures that threaten to impact the quality and breadth of both their provision and student outcomes, according to new analysis by PwC and Universities UK.

PwC was commissioned by Universities UK (UUK) to consider the financial sustainability of the UK’s Higher Education sector by analysing and running sensitivities on the 2022/23 regulatory financial forecasts of 84 UUK members across England, Northern Ireland and Scotland who chose to participate by providing their Office for Students and Scottish Funding Council returns.

Our report highlights that whilst the UK Higher Education sector is internationally recognised as being one of the best places to study in the world, over the past decade it has been facing increasing financial pressures, given that the fee cap for domestic students has been frozen since 2012 (with a small uplift for providers with a Teaching Excellence Framework award in 2017), despite increasing inflationary cost pressures. Our analysis explores this future outlook in further detail and highlights the risks to the sector if these financial conditions persist. In particular it identifies the risk posed by an increased reliance on international students to cross-subsidise domestic teaching and research activities.

However, providers are already adopting strategies to drive meaningful and sustainable change and secure a viable long-term future. The ability of each provider to respond and adapt to anticipated threats and opportunities will vary, thereby impacting the shape and size of the sector going forward.


c.285 Higher Education providers across the UK, hosting 2.9m students and contributing £71bn to GDP in 2021/22


Domestic fees in England are now worth c.£6.0k in 2012 prices


By 2026/27, international student fees are forecast to become up to 66% of all course fee income for England & Northern Ireland participating UUK members


An estimated £6.6bn of investment will be required to decarbonise Higher Education estates in the UK


c.40% of all participating members are forecasting a deficit in 2023/24

Contact us

Paul Kett

Paul Kett

Senior Adviser and Global Director Education and Skills, PwC United Kingdom

Tel: +44 (0)7483 398299

Damien Ashford

Damien Ashford

Partner, Education Lead and Government and Health Industries Restructuring Leader, PwC United Kingdom

Tel: +44 (0)7787 120228

Follow us