BUFDG Digest 28 January

SECTOR  

The government has released the new International Education Strategy, aiming to boost education exports to £40bn by 2030. The announcement offers some clarity on the direction of travel, and the promise to cut red tape and give providers firmer direction will be welcomed by the sector, but the strategy leans heavily on expanding overseas TNE (transnational education) markets and shifting focus away from growing international student numbers in the UK. Sector commentary paints a mixed but revealing picture: Wonkhe notes that falling international student numbers have “been a political choice in the face of wider public concerns around immigration rather than any failing among universities”, a guest piece from former Glasgow Principal, Anton Muscatelli, notes that the strategy has launched into a fast-changing world, where there has been a “very sudden” shift from the UK being one of the “Big Four” international student destinations to finding itself among a “Big Fourteen”, and Jim Dickinson compares the UK strategy with those of competitor countries; meanwhile, UUK International strikes an optimistic tone, calling the strategy “a positive and holistic vision” that aligns with sector priorities and strengthens the role of universities in the UK’s global success. Wonkhe’s DK gives a rundown of everything in the strategy, and The Pie’s ten talking points also provide a useful breakdown, where Diana Beech also argues that the strategy lacks boldness and direction.  

HESA has released the first set of student numbers data for 2024-25, and it shows an overall fall in student numbers for the second year in a row – a 1% overall decrease driven by a 10% decrease in international entrants to postgraduate taught courses. Meanwhile, numbers of TNE students studying wholly overseas for UK qualifications increased by 8%, continuing a trend of annual growth. Wonkhe digs into the data here. The UCAS  end of cycle data for the 2025 application cycle is also out and DK has analysed the shift out of it over on Wonkhe. He pulls out some interesting comparisons and changes, as well as his usual interactive tables. He also notes that the 2025 data includes offer-making data which isn’t usually available until later, and a range of new equalities parameters, and that, as a result, “provider-level changes in behavior are by far the most interesting component of this release”.

The 2026 UCAS January applicant data (including several new features this year) shows a 3.1% overall increase, including a 4.8% increase in 18 year olds (at a record high, almost certainly due to population growth), and a 5.1% increase in international applicants (though not all international applicants use UCAS), but a 6.1% decrease in applicants aged 21 or over. The UCAS Director of Data and Analysis warns against just focusing on the headline numbers and looks at the key themes from the dataset over on Wonkhe, and you can watch a recording or view the slides from the UCAS data briefing here.

The Competition and Markets Authority (CMA) has released new sector‑specific guidance outlining how H E providers can collaborate confidently while remaining within competition law. Developed jointly with DSIT, DfE and the Department for Business and Trade, the guidance responds directly to long‑running sector concerns that legal uncertainty has been inhibiting meaningful partnership‑working. It builds on priorities identified in the Universities UK Transformation and Efficiency Taskforce report published last summer, and aligns with the government’s wider agenda for a more sustainable and collaborative sector.

The PIE News has published an interview with an anonymous university CFO, providing “an uncensored view of university finances”. The CFO thinks a “financial crisis” for the sector is a “sensationalist label”, but the reality is that universities are “struggling”. Nevertheless there are “simply too many programs” and in order to survive some “universities need to get big, get niche, or get out”. The PIE News also covers the story that a third of universities face financial deficits, based on analysis of 104 institutions by THE(£).

A report from conservative think-tank, the Centre for Social Justice, shows that 707,000 graduates are out of work and claiming welfare benefits – a 46% rise since 2019. 400,000 of these are claiming universal credit and 240,000 – double the number from 2019 – stating they cannot work for health reasons. The ‘Rewiring Education’ report argues that “Britain’s education system is profoundly unbalanced and needs to be comprehensively rewired”. Though released in December, the report was covered by the BBC, The Times(£), and The Telegraph(£) this week.

Sussex’s three universities have joined key regional partners including local authorities, public services, and business networks to sign the Civic University Agreement, ‘Sustainable, Connected, and Equitable Sussex’. The initiative reflects national policy aims that link educational, social, and environmental outcomes with stronger financial sustainability across local areas. Through this agreement, the University of Sussex, the University of Brighton, and the University of Chichester commit to working together to boost regional economic growth and address social, environmental, and health challenges, emphasising sustainability, skills and wellbeing, and cultural enrichment.

The Institute for Fiscal Studies has published its annual report on education spending in England for 2025-26. The IFS report covers changes over time to income in relation to students (mainly covering England, though it touches on maintenance in the other UK regions), and of the international student levy it says “The levy is expected to raise £445 million in its first year and to reduce provider income by around £270 million. There is no meaningful sense in which the revenues raised from this levy will ‘pay for’ the introduction of maintenance grants for domestic students, as government has claimed.” The picture painted is not a rosy one for universities or their students (or for other sections of the education system).

Wonkhe has been talking to COOs and CFOs/FDs to discuss finance governance in H E - the article based on these discussions sets up their webinar tomorrow (Thursday 29 January) exploring effective governance of university finances. You can book onto the Wonkhe ‘Show them the money’ webinar here (including BUFDG’s very own Karel Thomas MBE on the distinguished panel).

Following the recent announcement that the UK will rejoin the Erasmus+ scheme from 2027, DfE has published application information for Turing international placements during 2026-27, confirming that the scheme (which was introduced following the UK’s withdrawal from Erasmus in 2020) will continue until then at least. HEPI argues the case for both schemes to continue, and Wonkhe looks at some of the “tweaks to the rules”, including increasing the household income threshold for the definition of a student from a disadvantaged background (who qualify for extra funding) from £25,000 to £35,000.

Unison is asking for “a sustainable, long-term funding model based on free education, one that values higher education not just for economic output” in its call for a radical overhaul of university funding, arguing that the current “reliance on tuition fees as the main funding mechanism for higher education is failing staff and students alike”.

Independent H E has published a report on its latest survey of its members. The report shows that while still small (3.3% of UK H E enrolments), the independent sector is growing fast (almost eight times faster than the traditional university sector between 2018-19 and 2023-24), and that its “established strength in short-course provision, alongside growing interest in modular delivery, indicates strong readiness for Lifelong Learning Entitlement (LLE) participation”.

Professor Libby Hackett has been appointed as the next Chief Executive of the Russell Group and will take up the role in May 2026. Professor Hackett is currently CEO of the Australian Public Policy Institute, an Australian government and university joint-venture set up to improve public policy.

Student loans have hit the news again over the past fortnight with the FT(£) questioning whether student loans will become the next mis-selling scandal and the Guardian highlighting how loan debt is increasing for graduates who are repaying them as their “repayments are dwarfed by the interest added”. However, HEPI’s Nick Hillman thinks the “current campaign on student loan interest may be misguided, misunderstood and misdirected” and points out ten reasons why.

ENGLAND

Membership of the recently announced Provider Panel has been confirmed by OfS, bringing together 11 senior leaders from across the sector to act as a “critical friend” and support more collaborative, informed regulation. Chaired by Verity Hancock (a former college principal and member of the OfS board since 2019), the panel aims to strengthen relationships with providers and deliver regulation that better serves students, and will advise on emerging risks, policy development, and how regulation affects different types of institutions.

Draft regulations have been published to legislate for the fee cap increase to £9,790 in 2026-27 and £10,050 in 2027-28. But Wonkhe spots some issues with how this will interact with the new LLE legislation from January 2027, and points out a few other things the Statutory Instrument sets out to do. In summary “A bill is coming … for the ostensible purpose of making a link between TEF and fee caps that already exists and is in use. And a draft SI has been laid which will be superseded very shortly after it has been enacted.”

The OfS has issued a stakeholder survey to accountable officers (usually Vice Chancellors) to better understand how the organisation is viewed by the institutions it regulates.

SCOTLAND

After a long journey through committees and reviews, Scotland has now passed its Tertiary Education and Training (Funding and Governance) (Scotland) Act. Wonkhe’s Michael Salmon charts its journey and what actually made the cut. And you can find Universities Scotland’s response here, which welcomes the £30m uplift to the capital budget in cash terms and the slightly above inflation settlement for teaching while highlighting that “it does not adequately address the sustained financial challenges the sector has faced over recent years”. The SFC responds here.

The SFC is undertaking an implementation evaluation of the Outcomes Framework and Assurance Model (OFAM) and Scotland’s Tertiary Quality Enhancement Framework (TQEF). You can find details of the evaluation exercise here.

WALES

The Welsh Government has published its response to an ongoing enquiry into Routes into post-16 education and training, including acknowledging the “need to review and consider current funding models to better deliver for learners, give stability to providers, and secure best value for public funds”, but also that the implementation of the recommendations will fall to the Government in place after May’s elections.

Elsewhere, the Minister for Further and Higher Education published a Tertiary Education Participation and Sustainability evidence paper setting out the five major challenges facing the sector in Wales, together with a call for submissions from stakeholders (open until 26 March) to gather evidence of financial pressures to support reform in the next Senedd term. Wonkhe’s Jim Dickinson highlights the complex pressures impacting Welsh HE, referring to the evidence paper as “a sustained attempt to look at interconnected problems in the round” including “genuine honesty about the constraints the system is operating under”.

Universities Wales has expressed disappointment at the lack of support for universities in the recent Welsh Budget for 2026-27, in light of ongoing financial pressures. On Wonkhe, the Chair of Universities Wales argues that H E must feature prominently in all party manifestos ahead of the 2026 Senedd elections, highlighting the crucial role universities play in economic growth, skills development, and long‑term financial sustainability.

Plaid Cymru’s education spokesperson has told THE(£) that “retaining Welsh students [is the] key to saving universities” in Wales, and this should continue after graduation where the narrative needs to change to “encourage young people to think that their destination is here in Wales where we can support them with good jobs”.

Medr has published its first annual report, covering 2024-25.

NORTHERN IRELAND

The Department of Finance has launched a consultation on a draft multi-year budget which has the potential to provide greater funding certainty to the local Hִ E sector following over a decade of one-year budgets. The Minister for the Economy has previously ruled out an above inflation increase to tuition fees. 

The Department for the Economy has launched a consultation into the approach to widening participation in H E in Northern Ireland, including improving financial support for learners who face financial barriers. The consultation closes on 16 April.

TAX AND PAYROLL

Our regular tax and payroll newsletter, TaxHE is moving to a monthly slot, on the second Thursday of each month, to enable Andrea and Julia to spend more time on the work that makes the most difference to the sector and all our members. They will also continue to use the BUFDG discussion boards and news articles as ways to get tax news to members quickly.

Don't forget you can still book onto next week's HMRC session for BUFDG members on employment status in the H E sector (5 February).

Andrea has created this initial draft to the consultation on the new Visitor Levy for England, in collaboration with AUDE (the Association of University Directors of Estates) and CUBO (the association for campus and commercial services professionals in H E and F E). Have a look and provide any feedback either on the discussion post or direct to Andrea by 6 February.

HaysMac has released a publication reminding universities of how to make RDEC claims for subsidiary companies.

PROCUREMENT

Jisc is inviting procurement professionals to sign up for its bi‑monthly digital update, designed to keep colleagues informed about procurement and licensing activity across the sector. It provides timely insights into sector-wide digital technology frameworks, Jisc-negotiated content and software agreements, opportunities for collaboration and good‑practice sharing, plus news of upcoming events and webinars.

THE(£) reports that six universities (Kent, Essex, Sussex, Sheffield, Lancaster and Surrey) have opted not to renew subscriptions to Elsevier journals, after Jisc announced the latest negotiated deals with the ‘big five’ publishers last month. Jisc’s head of research licensing had previously acknowledged that given the “unprecedented financial crisis impacting institutions across the sector … some will simply not be able to participate in these offers”. THE states that most universities are “yet to declare whether they are taking up the Jisc-negotiated Elsevier deal, with the 2023-25 agreement extended for a month until the end of January to allow for further talks”.

COUNTER FRAUD

The Global Education Recruitment Standards Authority (GERSA) has published a paper on the implications of the Criminal Finances Act 2017 for UK higher education institutions, focusing on international education. (You can learn more about CFA 2017 in general using our e-learning course ‘Criminal Finances Act/Corporate Criminal Offence'). GERSA’s paper highlights particular areas of risk for universities including international recruitment networks and TNE arrangements, and makes recommendations on how to evidence compliance.

FINANCIAL REPORTING

Save the date for the next SORP Implementation Forum, which will take place on 17 March. The next meeting will focus on case study examples of preparing for SORP, and updates on regulatory matters arising from the changes.

HaysMac are hosting webinars on SORP 2026 income recognition (11 March) and applying the new SORP in practice (3 June).

RESEARCH AND INNOVATION

As mentioned in the Procurement section above, THE(£) reports that six research-intensive universities will not be renewing their subscriptions to Elsevier, the largest publisher of academic journals, following general acceptance of an agreement negotiated by Jisc.

UKRI has published a new strategy for the creative and cultural economy, alongside a £27m funding package under the Arts and Humanities Research Council’s Creative Clusters programme.

Innovate UK will be hosting monthly drop-in sessions for BUFDG members, starting on 17 February, and taking place every fourth Tuesday thereafter. Members of the Horizon Guarantee team will be on hand every month, with members of the wider operations team attending alternate sessions. A list of dates for the next six months and details on how to register will be published next week.

The next Research Finance Forum will take place on 25 February. Topics will include Tax on Research, UKRI’s resilience team on understanding the true cost of postgraduate research, an update on Innovate UK and TRAC facilities engagement, using the forum's Teams channel, and more. When registering, please specify discussion points or topics you would find useful, and we will do our best to shape the session around popular themes.

PENSIONS

Julia has issued the latest BUFDG Pensions newsletter, which includes news on USS, TPS and LGPS (including the news highlighted below) and more.

UCEA has published a position paper on Financial Stability in Higher Education: Enabling a Sustainable Approach to Pension Provision, also sending a copy to skills minister, Jacqui Smith. It argues that the contribution rates paid by H E providers into the Teachers Pension Scheme are exacerbating the sector’s current financial pressures. It compares the increase in TPS contributions of 15% to the decrease in USS contributions of 12%, and states that additional TPS contributions since April 2024 equated to paying for around 1,700 academic roles (£125m per year).

As previously reported in the Digest, Northumbria University has been seeking a solution to its TPS cost troubles by offering staff the option to transfer to USS and sharing some of the cost savings with staff  (this HEPI post sets out their solution). THE(£) reports that Northumbria now faces the prospect of strike action over the issue, with a union ballot over industrial action seeing a 60% turnout with 80% of those voting being in favour of strikes.

UCEA is offering a Teams meeting to discuss concerns around LGPS valuations and agree a way forward (e.g. the LGPS Scheme Advisory Board). If you want to be part of this meeting on 5 February 2-3pm, email Richard Paul at UCEA who will be convening the meeting.

UCEA has also provided an update on the exploration of Conditional Indexation (CI) as an alternative scheme design that could provide additional stability for USS, including a recent report designed to assess potential benefits and drawbacks of CI and a set of useful questions and answers that have been developed to help answer questions from staff and pensions working groups.

JOB OF THE FORTNIGHT

The job of the fortnight is the role of Financial Analyst at the Royal Northern College of Music, based in Manchester (though the role is suitable for blended working), to work alongside the Director of Finance to analyse the financial performance of the RNCM, offering insight into current activities and assessing the viability of new activity. The postholder will develop enhanced reporting and analysis for both the Executive Team and Board of Governors and will work alongside the Deputy Director of Finance (Management Information) to provide accurate and meaningful financial reporting.