Cash-strapped universities accused of risking UK reputation

Cash-strapped university bosses have been accused of risking the UK’s international reputation after one of England’s leading Russell Group universities confirmed that its new city centre campus could be sold at a loss of tens of millions of pounds – while another university is under fire for a huge increase in international students enrolled on its postgraduate one-year research degrees, which are not subject to the ban on dependants.

The University of Nottingham is understood to have spent over £40 million (US$54.8 million), on top of the £37.5 million spent to buy former HMRC offices in 2021, to create a “dynamic” city centre campus. Now the development at Castle Meadow is up for sale at a fraction of the development cost.

The research-intensive university’s annual financial statements for the year ending 31 July 2025 reveal that Nottingham is shrinking the size of its estate and writing down the value of its Castle Meadow and King's Meadow campus – with a “total impairment” of £74.8 million.

This has turned an underlying surplus of £0.8 million for last year into an adjusted deficit of £85.3 million after the university also spent £11.3 million on “restructuring costs”, which involved hundreds of job losses and course closures.

‘Vanity’ project

The University and College Union (UCU) had labelled the Castle Meadow campus a “vanity project” even before news of its sale was confirmed, but there was shock when the local Nottingham Post newspaper reported that the showpiece new campus could be sold for as little as £14.4 million.

Professor Jane Norman, who took over as Nottingham’s vice-chancellor in January 2025, told the Nottingham Post: “We bought Castle Meadow campus at a time when the university planned to grow and expand its footprint in the city centre, developing new opportunities for teaching, research and partnership activity.

“The financial landscape for Nottingham and the wider university sector has changed dramatically in the last five years, and we have needed to change our plans significantly.”

She said: “The surveyor valuations showed that the values on our balance sheet were higher than they should be, and we chose to make the adjustment in year to reflect updated valuations.

“This is an accounting impairment, meaning a paper adjustment rather than money physically leaving the organisation.”

Nevertheless, there is clearly anger that the value of what the previous annual report called “a dynamic hub for innovation and entrepreneurship” has been reduced by £64 million when universities up and down the United Kingdom are struggling to make ends meet and laying off staff and closing down less popular academic courses.

The university created an outcry after announcing that it was suspending recruitment to music and modern languages degrees, putting part of the blame on continued financial uncertainty and the proposed international student levy.

Among threatened courses are Nottingham’s undergraduate degrees in French, German, Russian and Hispanic subjects, as well as nursing courses in child health and mental health.

Norman told University World News: “The financial position of the higher education sector remains extremely precarious and is presenting considerable challenges to universities across the UK.

“Since becoming vice-chancellor I have been very clear that ensuring the long-term sustainability and world-class reputation of this great university is our number one priority. This has meant making some difficult decisions about the size and shape of our organisation.”

Warnings ignored

Staff union UCU said it warned management at Nottingham University in 2024 against “poor financial decision-making”, with the purchase of Castle Meadow Campus being “the most notable example”. But it was ignored.

In a message to members in December 2024, the UCU branch committee said “two major liquidity crises within the space of four years” showed “the current financial model is not resilient to shocks”.

The union urged the management to “exercise extreme caution” in pursuing strategic capital spending programmes and to “avoid a risky strategy of the shrinking portfolio of activities that reduces research and teaching capacity in an uncertain environment”.

Lopa Leach, president of the local UCU branch, told Nottingham Live that the changes now planned would increase the student ratio from 13 per staff member to around 20 and pose “serious risks” to the university’s academic standing.

“The modelling makes clear that these changes would damage Nottingham’s research environment, harm the student experience and significantly weaken our national and global rankings,” she said.

Concern over enrolment surge

Meanwhile, there is growing concern that a number of UK universities are ignoring strong advice against increasing the recruitment of overseas students to master of research (MRes) degrees after a ban on taught masters international students bringing their dependants.

The ban was introduced by the last (Conservative) government in a bid to cut net migration numbers and has been continued by the current Labour administration.

However, it didn’t cover postgraduate research degrees, including MRes programmes, which normally prepare students for doctoral studies.

Data obtained by freedom of information (FoI) requests by Times Higher Education reveal that the University of Greater Manchester, which until recently was known as the University of Bolton, grew international enrolment on its MRes courses to 1,748 students in 2025-26, up from 24 students four years ago.

The Times Higher reported that the number “jumped dramatically from 82 students in 2023 and 2024 to 914 in 2024 to 2025, coinciding with a rule change that meant international students could no longer bring their families with them to the UK unless they were enrolled on certain postgraduate research courses”.

York St John was another university seeing a significant increase in MRes students – growing from one in 2023 and 2024 to 387 in 2025 and 2026, according to the FoI request of Times Higher.

University World News reported in June last year that Dr Adam Tickell, vice-chancellor of the University of Birmingham, had warned that UK universities were lucky to only receive a “yellow card” in the Labour government's recent immigration white paper after failing to address growing concerns of unethical admissions practices by some international recruitment agents.

Tickell specifically pointed to the significant increase in MRes degrees after the dependant ban on taught masters overseas students and warned that this could be seen as the sector “finding ways to arbitrage the law” and abuse the system.

Tickell said: “We’ve come close to a red card; we’ve certainly had a yellow card.”

High risk for the sector

Dr Diana Beech, a former government higher education adviser who is now director of the Finsbury Institute at City St George’s University of London, echoed the warning and told University World News: “A surge in international MRes enrolments is undoubtedly high risk for the sector's reputation and almost certain to draw the attention of the Home Office, particularly where these programmes run for just 12 months.”

Beech said: “The sheer pace of growth in numbers raises real concerns about whether students are receiving adequate supervisory support, and institutions adopting these models risk not only undermining themselves but also fuelling criticism that the sector as a whole is providing backdoor routes to immigration.”

However, she added that while such behaviour cannot be excused, “it does need to be understood within the wider context of acute financial strain” across UK higher education.

Beech said: “Faced with rising costs and limited room to manoeuvre, some providers feel pushed towards increasingly risky strategies simply to keep the lights on.”

A spokesperson who advises Greater Manchester University on media relations told University World News: “Apologies, but on this occasion, the University will not be commenting.”

Scale of challenges

Universities UK, which represents vice-chancellors across the UK higher education sector, said it wouldn't make any specific comment on the situation at Nottingham or the University of Greater Manchester but did outline its position on university finances and on MRes visas in general.

UUK said: “Universities have been, and continue to be, working hard to ensure their long-term stability. However, the scale of the challenge is clear following years of stagnant government funding and tuition fees, combined with spiralling inflation.

“The decision to increase fees in England (for home students) in line with inflation was the right thing to do to begin to address that, but it far from solves the problem.

“Indeed, the evidence suggests that the proposed international student levy could undo this [progress] by reducing income significantly, limiting universities’ ability to support growth-driving research, teach students in subjects vital to the future economy and widen participation.”

Monitoring growth

On MRes visas, UUK said: “Government has been clear that it would monitor growth of MRes programmes and associated dependant visas.

“New requirements were included in the sponsor guidance that allow regulators to monitor changes in provision and, where necessary, to act where concerns are identified.

“Universities UK has consistently highlighted the importance of this issue with universities, and we have warned our members that it had the potential to undermine the sector's position as a trusted and responsible partner in the UK's immigration system.”

UUK noted: “In November, we asked our members not to grow MRes numbers further, which highlights the seriousness with which we treat government concerns.

“Importantly, the latest Home Office data shows that dependant numbers have continued to fall, and they remain more than 85% below the 2023 figures.

“We would therefore urge government to continue working with us and to use the targeted interventions that were incorporated into the regulatory framework to address this issue rather than imposing further blanket restrictions unnecessarily.”

Spending on HE falls

Meanwhile, a new report on education spending from 2025 to 2026 in England from the Institute for Fiscal Studies (IFS), the UK’s leading independent economics research institute, highlighted the difficult financial situation facing UK universities.

It said that while spending per child on early-year education had doubled from 2010 and 2011 to 2024 and 2025 (to £5,500 per child), spending had declined by 5% (to £9,900 per student) on up-front teaching in higher education.

“This is around £2,700, or 22% lower in real terms,” it noted.

While universities are free to set the level of tuition fees charged to international students, the last government held back rises in home tuition fees for UK students at English universities.

Graduates now pay for the bulk of their tuition through student loans, with the taxpayer set to bear only 3% of the total cost, down from 9%, before the latest changes on loan repayment terms for those who started courses in 2022 to 2023, said the IFS report.

Nic Mitchell is a UK-based freelance journalist and PR consultant specialising in European and international higher education. He blogs at www.delacourcommunications.com.