Swansea University is the latest higher education institution in Wales to confirm it is reducing its headcount against the backdrop of a challenging trading environment. The university said nearly 200 staff have already agreed to leave voluntarily.
With tougher visa restrictions for international students and inflationary pressures on running costs, Welsh and UK universities are facing a challenging financial outlook with vice-chancellor of Cardiff University, Wendy Larner, having described the sector’s business model as “broken.”
In recent years many have become increasingly reliant on higher fee paying international undergraduate and postgraduate students - although there can be significant agent fee costs. There is evidence that the new visa restrictions, introduced in January by the UK Government and which mean international students are no longer able to bring dependents to the UK unless on postgraduate research courses, is already deterring interest in the UK.
Read More:University of South Wales launch voluntary exit scheme
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Swansea University, which has nearly 17,000 undergraduates and more than 7,600 postgraduates, has confirmed it has introduced a voluntary severance scheme. Since being launched some 189 exits have been authorised.
In a statement the university said: “In common with much of the higher education sector, Swansea University is facing financial challenges. We have a number of measures in place to improve our future financial sustainability, including increasing our income generation, making non-pay savings and offering a voluntary severance scheme for staff.
"The scheme is open to all staff, with decisions made on an individual, case by case basis. Our current headcount is 3,879 and to date 189 voluntary exit scheme requests have been approved.”
Swansea University, where international students make up 25.9% of the total, said its voluntary scheme is currently open ended having been launched last September.
Last month the University of South Wales confirmed it is looking to reduce staffing numbers in the face of what it described as a challenging financial environment.
The university, which has around 23,000 students, wouldn’t comment on the number of staff that could leave and financial savings created, but that it had launched a voluntary exit scheme.
The university over the last five years has become increasingly dependent oninternational students. Its students from Bangladesh, Sri Lanka, Pakistan, India and Nigeria, have grown by 600% since 2019. International students make up around a third of its current cohort.
A University of South Wales spokesperson said: “The university has opened a voluntary exit scheme for colleagues. This will assist the university to make some financial savings, and support the future transformation of our delivery, workforce, and systems. This is one of a range of measures being taken to address a financially challenging environment, which many universities across the country are experiencing.”
In February the Welsh Government announced a £250 rise in academic year tuition fees for undergraduates, taking the cap up to £9,250. It was the first rise since 2011, and puts the student fee regime in Wales on the same footing as the rest of the UK. However, it also cut its direct funding to the university sector.
Cardiff, which has more than 30,000 students and around 6,100 staff, is undergoing a review led by vice-chancellor Ms Larner, who took up her role last September.
In the university’s financial accounts for 2022-23 she described the financial sitution facing Welsh universities as “unsustainable.”
She added: “For me, it’s clear that the current business model for universities is broken. The format that has dominated the sector for the last decade or so is now in question. That’s a reality – and a challenge – that we need to address in the year ahead.”
While before the increase in student fees announnced by the Welsh Government she said home tuition fees don’t cover teaching costs.
She added; “This leaves universities like Cardiff in a challenging position. We’re trying to balance the books with overseas students – and while we’re aiming to grow our international student numbers, this isn’t how or why we wanted to do it. As a global-civic university, international students are crucial and valued members of our community but they shouldn’t be propping up your finances.”
For its 2022-23 financial year the university had an operating surplus of £16.3m and borrowings of just over £421m. The vast majority of its borrowings (£420.7m) is in the form of a bond, which financed its innovation campus. It is incurring an interest rate of 3% and is repayable in 2055.
The economic impact of Welsh universities, not just directly, but through supply chains and induced spending, is huge. Cardiff University alone, based on independent research from London Economics, has an annual impact on the UK economy of more than £3.6bn. According to the Charity Commission the university has nearly 1,000 staff earning at least £60,000 a year.
Professor Dylan Jones-Evans said the university sector in Wales is facing a crisis and has called for Welsh Government to instigate an urgent review.
He said: “The latest financial accounts of Welsh universities show that while the overall income from full-time home students has dropped by £16m between 2022 and 2023, that from overseas students has gone up by £44m.
“As a result, the financial dependency on international fees in Welsh higher education has increased to 30% of all student income in 2023 (or £312m). This means that even a moderate decrease in the international market will have severe financial repercussions, which we are starting to see.
“It is imperative that the new Welsh Government now undertakes an urgent review of the future of our universities and conducts an honest and open debate on whether the Welsh higher education sector is fit for purpose, how it should be organised and funded in the future and, most importantly, does it meet the needs of our nation.
“If it does not, and our universities continue their decline, then Wales will be a poorer place in more ways than one.”
A spokesperson for Universities Wales, the representative body for Welsh universities, said: "Welsh universities are facing some of the most difficult financial circumstances in recent memory, with costs increasing faster than income and a funding system that no longer covers the cost of teaching home students or research and innovation.
“For quite some time universities right across the country have been making tough decisions to try to control costs. And while there are things that universities are doing to improve sustainability, these do not address the urgent short-term challenges.
“Our universities serve people and businesses across the entirety of Wales. The economic impact of the decisions that universities would have to make in the near future, were nothing to change, would be felt across health, education and more.
“The apparent fall in demand from international students across the sector is also concerning. Under the current funding system, international student fees are vital, making it possible for universities to offer a broader range of opportunities for home students as well as helping cross-subsidise the UK’s research base.
“It is clear that policy changes by UK Government last year, alongside increased competition from other countries, have had a significant impact on the UK’s attractiveness to international students. It is troubling that current policy and rhetoric seems to be undermining the success of the UK Government’s own International education strategy.”