Written evidence by UNISON (HEF0055)

 

Education committee

Higher Education and Funding: Threat of Insolvency and International Students

 

Submission contents

-          Submission summary

-          Introduction to UNISON

-          Background

-          Consultation questions and answers

 

Submission summary

UNISON’s submission to the Education Select Committee outlines the growing financial instability facing UK higher education and the urgent need for reform. It highlights how the current market-based model, built on capped domestic fees, declining public funding, and overreliance on international students, is unsustainable and has left institutions vulnerable to insolvency. UNISON argues that there is no fit-for-purpose statutory insolvency regime for higher education, leaving students, staff, and communities exposed. The union calls for higher education to be restored as a publicly funded service, with stable investment, strategic oversight, and workforce protections at its core. It recommends introducing a statutory insolvency framework, strengthening employment and pension safeguards, rebalancing the sector’s funding model, and embedding trade union involvement in governance. The submission warns that without decisive intervention, institutional collapse will have devastating consequences for local economies, public services, and national policy objectives.

 

Introduction to UNISON

UNISON is the UK's largest union with 1.3 million members. Our members work in public services, for private contractors providing public services and in the essential utilities. They include frontline staff and managers, working full or part time in local authorities, the NHS, the police service, higher education, colleges and schools, the electricity, gas and water industries, transport and the voluntary sector.

 

UNISON is one of the largest unions in the higher education sector, supporting thousands of members working in universities. We represent higher education members employed by universities directly, or who work for a contractor supplying services. These roles include:

 

We negotiate nationally and locally to protect pay, terms and conditions and to prevent members from being outsourced to private companies. UNISON representatives help to ensure a safe working environment and we campaign for decent pay in universities – including a living wage for the lowest paid – as well as an eradication of the gender pay gap and to stop the use of zero-hour contracts and the casualisation of work.

 

Background

Higher education is in crisis. The combination of tuition fees, Brexit, declining international student numbers, exacerbated by political circumstances that are hostile to immigration, and inflationary pressure has placed some universities in incredibly challenging circumstances.

 

 


 

 

Across the sector, we are seeing cuts and redundancies at an alarming rate, and UNISON members are feeling the devastating effects of closures, cutbacks, and withdrawal of services. Many UNISON branches and regions are running campaigns in response to proposed cuts, and many more will be launching campaigns in the near future. An estimated 70 institutions are reducing staffing numbers to cut costs. And even prior to the current situation, our members have seen their pay and conditions decline continuously for the past fourteen years. Since 2010, the pay our members receive has reduced by 28% in real terms, with an alarming 75% of our members telling us they are concerned about coping with the cost of living and affording necessities such as food, energy, and housing. The Office for Students expects that in 2025-26, 72% of universities could be spending more money than they have coming in.

 

UNISON is running a campaign called ‘Fund Our Future’. The campaign is calling for fundamental changes in the way HE is funded and we are supporting branches in local campaigns fighting cuts, as well lobbying the UK and devolved governments. UNISON national secretary for education Mike Short said: “Higher education is in a state of crisis. Universities are closing courses and making our members redundant because they simply don’t have enough money.”

 

Considering this context, we welcome the series of inquiries announced by the Education Select Committee relating to the future of higher education funding. The matters of this particular inquiry, relating to international students and insolvency, are of significant interest to our members.

 

The Office for Students has publicly stated that institutional failure is a legitimate feature of a healthy, competitive sector. In the 2016 white paper Success as a Knowledge Economy, the government at the time made clear that it would not intervene to prevent market exit. Responsibility for an orderly exit was to remain with the provider, and student protection plans (SPPs) were intended to offer mitigation. Staff protections were not addressed.

 

That policy logic, of higher education as a competitive marketplace where failure is allowed, has now reached its inevitable consequence. In May 2025, the OfS finally acknowledged that current arrangements are insufficient and confirmed it had begun developing internal contingency plans for managing institutional failure. These efforts remain in early stages, with no public detail and no evidence that trade unions or staff perspectives are part of the planning.

 

UNISON warned about these risks nearly a decade ago. In our 2016 submission to the Public Bill Committee on the Higher Education and Research Bill, we strongly opposed the creation of a system that incentivised market failure. We criticised the reliance on SPPs as inadequate, warned of the dangers of increasing competition at a time of financial volatility, and highlighted the risks to students, staff, and local communities if institutions were allowed to fail without safeguards. We were clear that fostering a market where institutions could easily enter, and fail, would undermine quality and stability, and have difficult consequences.

 

Consultation questions

 

How will current Government policies affect the financial stability of higher education institutions?

Recent government policies have significantly weakened the financial stability of higher education institutions across the UK, with particularly acute effects in England. The undergraduate tuition fee cap in England was until 2024 frozen at £9,250, when it was raised to £9,535. When adjusted for inflation, this represents a real-terms reduction of over 20%, equivalent to around £6,600 in 2024 prices (Universities UK, 2023). Institutions continue to face rising costs due to inflation, increasing pay and pension liabilities, and the growing expense of maintaining estates and services. This has driven many universities to become heavily reliant on income from international students, whose uncapped fees often exceed £20,000 per year. However, recent government measures to reduce net migration, such as restrictions on international students bringing dependents, have already led to a fall in applications from key markets such as India and Nigeria (Home Office, 2024), destabilising the cross-subsidy model that sustains core teaching of domestic students and research activity.

 

While higher education policy is devolved, similar pressures are emerging across the UK. In Scotland, universities receive more direct public funding, and tuition is free for domestic students, but this model has come under increasing strain due to static budgets and rising costs. In Wales, the tuition fee cap has remained at £9,000, and institutions rely on a mix of fee income and public grants, but funding per student is also falling in real terms. In Northern Ireland, the cap is lower still, £4,710 for local students, leaving universities particularly dependent on public support, which has not kept pace with demand. Across all four nations, financial instability is growing. Without structural reform and renewed public investment, higher education providers face an increasingly unsustainable financial future, regardless of geography.

 

What implications will these policies have on future tuition fee increases?

Despite the real-terms erosion of tuition fee income, there is little political appetite to raise domestic tuition fees. Successive governments have resisted any significant increase to the cap due to widespread public opposition to increasing the student debt burden and concerns over access. While institutions are under growing financial strain, many are instead relying on increasing numbers of international students to plug the gap, an approach that is now reaching its limits. Without additional government investment or the return of direct public funding, the sector faces a widening deficit. The Russell Group has estimated that universities are currently subsidising domestic undergraduate education by up to £4,000 per student per year. UNISON believes this situation is unsustainable and unjust. The union firmly opposes tuition fees in all forms and supports the long-term goal of free higher education, funded through general taxation. Until that is achieved, the refusal to reform the current model risks forcing institutions into damaging cost-cutting measures, staff redundancies, and course closures, rather than providing a pathway to sustainability.

 

How will the interaction between international student enrolment and tuition fees shape the sector’s financial outlook?

The financial outlook for UK higher education is now dangerously dependent on international student enrolment. In many institutions, especially within the Russell Group, overseas students now account for the majority of tuition fee income. At University College London, for example, 68.9% of total tuition fee revenue in 2022–2023 came from international students, totalling £640 million (HESA, 2024). This income does not merely support teaching but also subsidises research, facilities, and essential student services. Any decline in international recruitment, whether due to changes in visa policy, global competition, or political hostility, has immediate and severe financial implications. Recent visa restrictions and anti immigration rhetoric from the previous government have already led to a drop in applications. If this continues, universities may be forced to scale back their operations, withdraw from regional campuses, or face the prospect of merger or closure. UNISON argues that this level of exposure to market volatility is not sustainable. It is inconsistent for government to treat higher education as a competitive market while simultaneously imposing fixed prices through the tuition fee cap and restricting access to key revenue streams, such as by limiting international student recruitment. This contradictory approach undermines the financial viability of institutions while denying them the tools available to commercial entities operating in a true market environment.

A stable, publicly funded higher education system, where the core mission of universities is not contingent on international fee income, is essential for long-term financial security, regional equality, and public trust.

 

What is the current state of insolvency processes for higher education institutions?

The current state of insolvency processes for higher education institutions (HEIs) in England is complex, fragmented, and notably underdeveloped compared to other parts of the education system. There is currently no unified, consistent process for managing the collapse of a higher education provider. Protections for staff, including employment rights, pensions, and continuity of service appear to be either minimal or entirely absent. These risks are compounded by the complex and varied legal status of higher education institutions, which means that the existing Insolvency Act 1986 often does not apply. Unlike further education providers, which are covered by a bespoke Special Administration Regime (SAR) under the Technical and Further Education Act 2017, there is no dedicated statutory insolvency regime for higher education. The Insolvency Act 1986 was not designed with the unique constitutional and legal status of many HEIs in mind, and as a result, many institutions do not fit neatly within its provisions.

 

There are four main types of institutions delivering higher education courses in England, and each is governed by a distinct legal framework. Pre-1992 universities are typically established by Royal Charter or by specific Acts of Parliament, which means they do not possess corporate status in the conventional sense and therefore cannot enter standard insolvency procedures such as administration or voluntary liquidation. Examples include institutions like the University of East Anglia and Durham University. Post-1992 universities, created as statutory corporations under the Education Reform Act 1988, face similar difficulties. These bodies, such as the University of Wolverhampton, also lie outside the scope of the Insolvency Act and lack formal mechanisms to undergo structured insolvency proceedings.

 

By contrast, private higher education providers, particularly those set up as companies limited by guarantee or by shares, can be wound up under the Insolvency Act. A notable example is GSM London, a private provider that entered liquidation in 2019, leaving thousands of students and staff displaced. These institutions are the only group within the higher education landscape currently subject to established corporate insolvency mechanisms. Further education colleges, which also deliver a significant volume of higher education qualifications, have the added protection of a statutory Special Administration Regime. This regime, introduced through the 2017 Act, was specifically designed to protect learners and ensure continuity of provision during financial distress. No such protection exists for students or staff in the higher education sector.

 

The Office for Students (OfS), established by the Higher Education and Research Act 2017, is responsible for overseeing the financial sustainability of registered HE providers. However, the OfS has no legal mandate to intervene to prevent failure. Its primary powers relate to the continuity of education for students and include the requirement for Student Protection Plans and, in extreme cases, the issuing of Student Protection Directions. These measures are intended to safeguard students' ability to complete their studies in the event of closure, but they do not extend to protecting employment, pensions, research continuity, or the broader community impact. Moreover, they have never been tested at scale and may prove inadequate in the face of a major institutional collapse. SPPs also often lack significant detail, do not have widespread understanding amongst university staff, and are not necessarily legally enforceable.

 

The current framework leaves the UK’s higher education system exposed. There is no coherent, fit-for-purpose insolvency regime tailored to the sector's distinctive legal and operational characteristics. While the OfS plays an important monitoring role, there are no statutory powers or mechanisms in place to manage insolvency in a way that protects the full range of stakeholders, including students, staff, and local communities. This regulatory gap poses significant risks in an environment of growing financial stress across the sector. TUPE protections (transfer of undertakings) may not apply unless an institution is transferred as a going concern – which would be unlikely in a distressed sale or fire-sale scenario. Unpaid wages, notice, and holiday pay may be recovered from the National Insurance Fund, but only up to capped statutory limits, and with no guarantees.

 

Pensions are a significant area of exposure in the event of institutional insolvency in the higher education sector. The Pension Protection Fund (PPF), established to provide compensation in the event of employer insolvency, only applies to eligible private sector defined benefit (DB) schemes. As a result, the major schemes in the higher education landscape, namely the Universities Superannuation Scheme (USS), the Local Government Pension Scheme (LGPS), and the Teachers’ Pension Scheme (TPS), fall outside its scope.

 

USS and LGPS are both multi-employer defined benefit schemes that operate on a last man standing basis. This means that the liabilities of a failed institution are not left behind in the form of unsecured claims but are instead absorbed by the remaining participating employers. While this provides continuity for members' accrued benefits, it creates a financial risk for the surviving institutions. In particular, when an institution exits a scheme, voluntarily or through insolvency, it may trigger a requirement for an exit payment or debt settlement, especially if the scheme assesses that the employer is no longer able to meet its long-term obligations. These are often referred to as “orphaned liabilities” and can result in significant cost pressures on the remaining members of the scheme. The level of financial risk can be particularly acute where the exiting institution is not a statutory body or lacks a strong covenant.

 

The TPS is structurally different. It is an unfunded, pay-as-you-go public sector scheme backed by the Exchequer. As such, it is not eligible for PPF protection, nor does it operate on a funded basis with pooled employer assets. Public sector providers participating in TPS, such as most schools, colleges, and some universities, do so under statutory arrangements. However, some independent HE providers and further education colleges delivering HE provision also participate in TPS, and their employer obligations are substantial. If such a provider were to become insolvent, there may be uncertainty about how accrued rights and service continuity would be treated, particularly in cases where the provider’s participation in TPS is contractual rather than statutory.

 

In summary, while USS and LGPS offer structural mechanisms to protect member benefits through the redistribution of liabilities, this protection comes at a cost to surviving employers and can cause strain across the sector. The TPS, although backed by the government, raises different concerns for non-statutory providers whose insolvency could leave unresolved questions about benefit entitlements and service history. None of the main schemes in the HE sector fall within the safety net of the Pension Protection Fund, meaning there is no universal backstop in the event of widespread institutional failure.

 

The charitable status of universities interacts in significant ways with both their legal form and the insolvency framework and helps explain why the current system is ill-suited to managing financial distress in the sector. Most UK universities are registered or exempt charities. Pre-1992 universities, those established by Royal Charter or statute, are typically exempt charities. This means they are recognised as charitable in law but are not registered with the Charity Commission, nor are they directly regulated by it. Charitable status has implications for insolvency because charities, whether exempt or registered, are subject to legal restrictions on how their assets can be used. Charitable assets are held in trust and must be used to further the charity’s purposes. In the event of financial failure, this creates legal and administrative barriers to traditional insolvency processes. For example, a liquidator cannot simply sell off a university’s assets and distribute the proceeds to creditors in the same way they might with a private company. Charity law generally requires that surplus charitable assets be transferred to another organisation with similar purposes, not returned to creditors or owners. This significantly complicates the administration of an insolvent university and limits the range of available restructuring tools.

 

Moreover, charity law does not provide a dedicated route for winding up insolvent charities that are not companies. The Insolvency Act 1986 applies only to companies, limited liability partnerships, and some unincorporated associations. It does not provide clear procedures for the orderly wind-up of institutions such as chartered universities or statutory corporations that also happen to be charities. The Charities Act 2011 allows the Charity Commission (or the principal regulator) to intervene in cases of mismanagement, but it does not confer powers to manage insolvency proceedings or protect stakeholders such as staff or students.

 

In short, the charitable status of most higher education institutions—especially those operating as exempt charities—further limits the applicability of existing insolvency law and creates additional regulatory ambiguity. The OfS, as principal regulator for exempt charities in the sector, has no powers equivalent to the Charity Commission in terms of intervention or asset protection, and certainly none to manage or prevent institutional failure. This reinforces the broader conclusion that the current legal framework is not fit for purpose. There is no coherent mechanism to manage the insolvency of charitable higher education providers in a way that respects both charity law and the operational needs of the sector.

 

The devolved governments in Scotland, Wales, and Northern Ireland likewise have no formal insolvency process for universities written into law. However, their policy approaches may differ in nuance. In Scotland, universities are funded through the Scottish Funding Council, and the government has shown willingness to prevent a collapse if a major institution is in trouble. In Wales, where universities are overseen by Medr, there have been calls for a more proactive stance to avoid any university bankruptcy. Welsh policymakers in 2019 argued that the regulator should be tasked with an explicit mandate to intervene to prevent the bankruptcy of any higher education institution in Wales by means of an emergency loan if necessary, explicitly distancing Wales from the English policy of letting failing institutions go to the wall. While this was a recommendation rather than established policy, it reflects a broader concern across the UK. In Northern Ireland, the small number of universities means any financial crises would likely be managed case-by-case by the Department for the Economy (which funds higher education), again with an emphasis on preventing disorderly failure. In all regions, though, the hard fact remains that there is no statutory “insolvency scheme” tailored to HEIs – any support or rescue is a matter of policy discretion and ad hoc intervention, not a predetermined legal process.

 

What measures exist to protect students, staff, and other stakeholders in case of institutional insolvency?

The existing measures to protect students, staff, and other stakeholders in the event of higher education institutional insolvency in the UK are limited, fragmented, and untested at scale. The primary regulatory tool for student protection is the Student Protection Plan, mandated by the Office for Students under the Higher Education and Research Act 2017. These plans are intended to outline contingency arrangements in the event of course or institutional closure. They may include proposals for student transfer to other providers, financial refunds, or the continuation of teaching. However, in practice, SPPs vary considerably in quality, detail, and credibility. They are not necessarily legally enforceable, are not backed by dedicated funding, and are rarely integrated into wider institutional contingency planning. In cases of actual closure, such as the liquidation of GSM London in 2019, SPPs have proved insufficient, leaving students with disrupted education, few practical options for continuation, and limited support in navigating the fallout.

 

For staff, the protections are even more minimal. There is no statutory framework or regulatory requirement for staff continuity planning in the event of institutional insolvency. General employment law applies, which means that employees are only entitled to the basic protections provided under the Employment Rights Act 1996. These include statutory redundancy pay, notice periods, and limited rights to claim unpaid wages, holiday pay, and notice pay from the National Insurance Fund. However, these payments are capped and only available in restricted circumstances. There are no obligations on the part of the institution or the OfS to preserve employment, consult meaningfully with unions, or maintain terms and conditions during a collapse. While the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) offer protection in cases where a business is transferred as a going concern, this is unlikely in insolvency scenarios where institutions are wound down or sold in parts.

 

Other stakeholders. including suppliers, local authorities, and research partners, have no special protections under higher education legislation. In the event of insolvency, they are treated as unsecured creditors under standard corporate insolvency law. Research funders may seek to reallocate grants, but there is no system in place to ensure the continuation of publicly funded research or community partnerships in the event of a provider’s closure. Collectively, the current regime prioritises minimal disruption to students in theory, but in practice offers limited reassurance or operational clarity to any group affected by institutional failure.

 

Are additional safeguards needed to strengthen protections?

Yes, substantial additional safeguards are urgently needed to protect students, staff, and other stakeholders in the event of institutional insolvency in the higher education sector. The current system is wholly inadequate, offering no coherent statutory framework to manage institutional failure, no guaranteed employment protections for staff, and no robust financial safety net to ensure educational continuity or preserve public trust. As recent experiences have shown, including the near-collapse of the University of Dundee in 2025, even well-established institutions can experience sudden financial distress, with far-reaching consequences for their communities. In that case, over 600 job losses were announced before a £22 million Scottish Government intervention, later rising to £40 million, was agreed, and a subsequent review revealed serious governance failures. The lack of a statutory process led to confusion, reactive measures, and avoidable harm. It also highlighted that government support, while sometimes available, tends to arrive late, inconsistently, and without a clear regulatory mechanism.

 

UNISON believes that a statutory higher education insolvency regime must now be developed, building on lessons from the Special Administration Regime (SAR) used in the further education sector. Such a regime should impose explicit duties to safeguard the continuity of education, employment, and the broader public interest in any insolvency or restructuring process. Crucially, it should guarantee the application of Transfer of Undertakings (Protection of Employment) (TUPE) regulations to all institutional transfers, whether or not the transfer occurs in an insolvency context. This would ensure that staff terms, conditions, and union recognition are preserved, even in times of crisis. In addition, pension liabilities under schemes such as the Local Government Pension Scheme (LGPS) and Universities Superannuation Scheme (USS) should be underwritten by the state or protected via a  mechanism to prevent cascading financial risks to remaining employers and ensure member benefits are secure. Where the university runs a self administered trust pension scheme (SAT), there is potentially a greater risk to staff pensions than failure in a member of the large multi-employer schemes.

 

The Higher Education Restructuring Regime (HERR), introduced during the COVID-19 pandemic, illustrates that central government can intervene effectively in a crisis, but also reveals the limitations of a temporary, reactive approach. The HERR offered emergency loans to at-risk institutions on the condition of deep restructuring and cost-cutting. It was explicitly framed as a last-resort, time-limited mechanism and has since been withdrawn. Once it closed, universities returned to a system where there is limited protection for students and none at all for institutions. This policy gap has left the sector exposed to market volatility and demographic change, with no permanent vehicle for support or recovery.

 

In response, UNISON calls on the Department for Education and the Office for Students to work with the higher education sector, including formal engagement with recognised trade unions, to develop robust emergency planning arrangements. These plans should include proactive financial monitoring, clear rescue protocols, and binding obligations for stakeholder consultation in the event of distress. Unions must be given a formal voice in all regulatory consultations, contingency planning, and institutional restructuring processes to ensure that workforce issues are fully accounted for.

 

Taken together, these measures would provide a much-needed framework for managing future financial crises in higher education, ensuring that institutions are not allowed to fail in ways that harm students, staff, and communities without recourse or accountability. The absence of such a regime represents a glaring weakness in the current system and addressing it must be a priority for government and regulators alike.

 

What would be the consequences of a higher education provider becoming insolvent?

The insolvency of a higher education provider would have far-reaching and damaging consequences for individuals, institutions, and the wider public interest. Students would face the immediate risk of educational disruption, potentially being forced to abandon their studies or transfer to other institutions without guarantees of continuity in course content, teaching quality, or recognition of prior learning. Even where transfer is possible, the emotional, academic, and financial toll on students can be severe. Staff would be subject to mass redundancies, often with little or no consultation, and without the protections typically afforded in orderly business transfers. This would result in the loss of jobs, trade union recognition, and access to long-term employment benefits, including pensions. In schemes like the Universities Superannuation Scheme (USS) and the Local Government Pension Scheme (LGPS), the sudden exit of a participating employer could trigger cessation valuations, orphaned liabilities, or deficit recovery plans, placing strain on the wider sector and potentially leading to increased contributions or reduced benefits for surviving institutions and their staff.

 

The reputational impact would also be severe. A university collapse would undermine confidence in the resilience and integrity of the UK higher education system, particularly among international students and partners who expect stability and long-term institutional viability. This reputational damage could have a chilling effect on overseas applications, investment, and research collaboration at a time when international recruitment is a major source of income for many institutions. In regions where a provider is a major employer or anchor institution, the collapse would have further social and economic ramifications, including the loss of skilled employment, the weakening of local service ecosystems, and the erosion of community identity.

 

The political consequences would be no less significant. In the absence of a statutory insolvency framework or coordinated emergency planning, the government would inevitably be held responsible for failing to prevent the collapse or protect those affected. This could undermine public confidence in the government's stewardship of the education system and contradict stated political priorities. Allowing a university to fail would directly undermine the government’s missions on skills, regional growth, social mobility, and global competitiveness. It would also be difficult to reconcile with broader economic aims, such as driving productivity, innovation, and levelling up. Rather than enabling growth, a university insolvency would represent a highly visible policy failure with damaging consequences for students, staff, and national interests alike.

 

How do higher education institutions contribute to growth in their local economies, the provision of public services, and their wider communities?

Higher education institutions play a foundational role in the economic, social, and civic life of the regions they serve. According to Universities UK, the higher education sector contributes over £130 billion annually to the UK economy and supports more than 815,000 jobs across the country. Universities are often among the largest employers in their areas, providing stable, high-skilled employment and sustaining extensive local supply chains. This economic presence has a multiplier effect: universities attract students, visitors, and investment, support local housing markets and services, and contribute to regeneration and development initiatives. In many towns and cities, the local university is not only an economic engine but a vital source of identity, cohesion, and future opportunity.

 

Beyond their economic footprint, universities are integral to the provision of public services. They educate and train much of the country’s future workforce in essential professions, including teachers, nurses, midwives, social workers, engineers, and planners. This role is especially important in rural and coastal areas where the local university may be the only accessible route into professional training. The closure of a provider could therefore lead to regional shortages in key public sector roles, undermining the delivery of health, education, and social care services.

 

Universities also act as civic institutions. They support community cohesion, provide spaces for dialogue and public engagement, and offer access to culture, education, and recreation. They partner with local authorities and voluntary organisations to address regional challenges such as poverty, social isolation, and health inequalities. Their contributions to innovation and enterprise, through research and development, spin-outs, and collaboration with business further drive productivity and regional resilience. This is particularly significant in post-industrial and levelling up areas, where universities are often the only remaining institutions with the capacity to lead economic transformation.

 

In this context, the loss of a university would not be a discrete institutional failure it would amount to the collapse of a core pillar of regional infrastructure. Entire communities would suffer the consequences, from job losses and economic contraction to reduced access to education, fewer public service professionals, and the erosion of civic life. The impact would be comparable to the closure of a major industry or public employer, with long-term ramifications for opportunity, growth, and social mobility. Safeguarding the sustainability of higher education institutions is therefore not only a matter of protecting individual students and staff, but of securing the future prosperity and cohesion of entire regions.

 

What strategies should be implemented to prevent insolvency and ensure sustainable regional provision of courses?

To prevent institutional insolvency and ensure sustainable regional provision of higher education, UNISON calls for a fundamental political reorientation of how universities are funded, governed, and understood in the UK. Higher education must be restored as a public service, not treated as a marketplace driven by competition and financial risk. The current model is failing. It saddles students with unaffordable levels of debt, forces universities into aggressive recruitment strategies focused on international students and leaves entire regions vulnerable when local institutions come under threat. This is neither sustainable nor just. It undermines public trust, weakens the sector’s resilience, and reduces education to a commodity rather than a collective good.

 

UNISON believes that the long-term solution must be a publicly funded system of free higher education, paid for through general taxation. Just as healthcare and schooling are funded because they benefit society, so too should universities be understood as part of the essential public infrastructure. Until that ambition is realised, immediate reforms must be made to reduce the sector’s overreliance on volatile tuition income. This means restoring direct public investment in both teaching and research and establishing a more equitable funding model that does not depend on placing financial burdens on students or gambling on overseas recruitment. Institutions need financial predictability in order to invest in staff, maintain course quality, and deliver long-term educational missions. UNISON would encourage the government to study international examples of free higher education and consider how they can be adapted for the UK.

 

In addition to funding reform, strategic oversight of course and subject provision must be reinstated. The current market-based approach has led to the emergence of subject deserts in key disciplines such as nursing, engineering, and social work. Regional disparities in access are growing, particularly in rural, coastal, and post-industrial areas. The Office for Students should map national and regional needs and coordinate course provision accordingly. This body must be empowered to protect strategically important subjects and prevent the withdrawal of provision from underserved areas. University closures and course cuts should not be decided in isolation based on short-term financial considerations but evaluated against long-term social and economic need.

 

Early warning systems must also be improved. Universities should be required to submit regular financial sustainability and risk reports that are developed in consultation with recognised trade unions. Where risks are identified, there must be a clear and accountable process for intervention before an institution reaches the point of collapse. In serious cases, government must be prepared to provide financial support, but this support should be conditional on the protection of jobs, fair governance reforms, and a clear plan for regional continuity. The experience of the Higher Education Restructuring Regime during the COVID-19 pandemic offers a starting point, but a standing mechanism must now be introduced, with greater transparency, accountability, and representation for staff and students.

 

Any future system must also embed workforce sustainability at its core. Universities cannot continue to rely on casualised contracts, eroded pay, and worsening conditions to balance their budgets. Trade unions must be given a formal voice in the regulatory system, with rights to be consulted on institutional finances, staffing plans, and course reviews. A strong and supported workforce is essential to the long-term health of the sector and to the success of any strategy to prevent institutional failure. Protecting regional provision is not simply a matter of keeping campuses open, it is about valuing the people who work in them, serve their communities, and deliver the education and research that the country needs.

 

UNISON

 

September 2025