Written evidence submitted by Kingston University London (HEF0059)
Education Committee
Higher Education and Funding: Threat of Insolvency and International Students
Introduction
Kingston University London is an ambitious, inclusive, innovative and enterprising institution, home to more than 20,000 students from over 140 countries. It is one of a select group of 26 UK universities recognised for outstanding teaching, student experience and outcomes, rated Gold across all categories in the Teaching Excellence Framework (TEF).
As the UK’s leading university for Future Skills, Kingston University is committed to equipping every undergraduate with nine core attributes most valued by employers preparing them for success in an evolving global economy. From Autumn 2025, every undergraduate student at the University will be completing Future Skills education as a core part of their degree programme, alongside their subject-specific learning.
The University’s research is globally respected, with 70 per cent rated world-leading or internationally excellent. Our societal impact is now expanding through the establishment of Knowledge Exchange and Research Institutes (KERIs), aligned with key areas of strength.
Kingston ranks among the UK’s top universities for graduate start-ups and maintains successful partnerships with leading global companies such as Adobe, Unilever and the John Lewis Partnership. It plays a vital civic role, supporting social mobility, driving innovation and contributing to economic growth both regionally and nationally through close collaboration with industry, the public sector and our diverse communities.
A progressive educational model, informed by research and our transformative Town House Strategy, positions Kingston University as a forward-thinking institution. It is actively addressing challenges and opportunities presented by changes in higher education funding, international student mobility and the future workforce while continuing to invest in our students, staff and making significant contributions to wider society.
Response to Terms of Reference
Impact of Government Policy on International Students
How will current Government policies affect the financial stability of higher education institutions?
The Government has neither a clear nor coherent policy for higher education. Whilst the increase in tuition fees for 2025/26 is welcomed, it is insufficient to redress the financial challenges facing the sector. Tuition fees have not kept pace with inflation and are now worth only some two-thirds of the real-term value of the fee when it was first introduced.
This has led to an over-reliance on income from international recruitment, which, due to government policy such as changes to the postgraduate work visa, is no longer sustainable. As it stands, all higher education institutions rely heavily on international student fees to cross-subsidise other areas, which will become even less achievable if the proposals within the Immigration White Paper are enacted. This is compounded by the negative rhetoric of the UK government towards immigration which is damaging the country’s attractiveness to international students. In response, some higher tariff institutions are increasing home target numbers, which has a destabilising effect on lower tariff universities.
There is still uncertainty around whether selective universities can effectively support the continuation and completion of students from less well-resourced backgrounds at the same volume. Student bursaries and maintenance loans have not kept pace with inflation, making it increasingly difficult for students from less well-resourced backgrounds to access or remain in university. This affects the strength and size of the home market, leading to implications on social mobility and the financial stability of higher education institutions.
What implications will these policies have on future tuition fee increases?
Universities have no meaningful control over home tuition fees, operating within constraints that prevent market-responsive pricing. High performing institutions should benefit from fee differentiation that reflects quality, yet current policy frameworks fail to reward excellence meaningfully. The Teaching Excellence Framework could theoretically allow such a measure.
International tuition fees being driven upwards makes the UK increasingly uncompetitive against other destinations. Other countries are now positioning themselves as more attractive alternatives, offering competitive programmes with lower costs and superior post-study opportunities.
The financial model underpinning the sector is fundamentally unsustainable. Were institutions such as Kingston University to lose overseas fee income, the resulting market correction would create instability throughout the entire system. High tariff universities competing for home students would generate a top-down financial squeeze, with pressure filtering throughout the sector. Current policies risk establishing a cycle in which higher fees reduce international appeal, diminishing student numbers and intensifying financial pressures. This forces further fee increases to maintain revenue streams, adversely impacting the UK's competitiveness in the global education market.
Furthermore, international student fees currently cross-subsidise home students and core institutional operations. Reducing these fees without securing replacement funding would upset sector finances and impact educational provision. Measures aimed at improving competitiveness or accessibility may generate unintended consequences, including serious quality erosion across the sector.
How will the interaction between international student enrolment and tuition fees shape the sector’s financial outlook?
The sector relies upon international student recruitment to compensate for the eroded value of the tuition fee. International students typically pay higher fees than domestic students, meaning that replacing a single international student often requires enrolling multiple home students. This creates an immediate financial shortfall that cannot easily be bridged through domestic recruitment alone. Responses of this nature will be uneven, with geographical and regional factors playing a decisive role in determining which institutions can weather these changes.
The overall impact across the sector will be negative, but the severity will vary dramatically based on each institution's location, reputation and ability to pivot their recruitment strategies effectively.
Higher education insolvency protections
What is the current state of insolvency processes for higher education institutions?
There are no explicit insolvency processes for higher education institutions. As witnessed in Scotland with the University of Dundee, external intervention and financial support may be required to ensure that a higher education institution can continue to operate. However, the Office for Students does not have powers of intervention nor funds to help to manage the threat of insolvency. Instead, reliance is placed on vague options of merger, divestment of property or other assets and contraction in size. These are promoted by the Office for Students as voluntary options for mutual support that institutions should conclude between themselves. However, this is unrealistic as no institution can make an open-ended commitment without knowing precisely the circumstances that may need to be enacted.
What measures exist to protect students, staff and other stakeholders in case of institutional insolvency?
Student Protection Plans can protect the interest of students in instances where institutions close courses, either enabling other progression routes to be secured or ensuring that they receive appropriate refunds and compensation. Likewise, the Office for Students has recently made clear that institutions have responsibility for sub-contracted provision, which should enhance protection for students by sharpening the decision-making that surrounds establishing such partnerships and monitoring their continued sustainability.
There are, however, no separate safeguards for stakeholders in the event of closure following institutional insolvency and no explicit prioritisation of any stakeholders, who would be treated with the same status as any other creditor.
Are additional safeguards needed to strengthen protections?
Protections in the event of complete institutional insolvency are non-existent. Government intervention is likely necessary in such a scenario. However, being managed through existing bureaucratic structures would be nearly impossible. Student Protection Plans presuppose that resources, staffing and infrastructure remain to safeguard student progression. While this works at an individual course level, it offers no protection in the event of whole-institution closure.
Any receiver would treat students and other stakeholders in the same way as any other creditor. There needs to be clarity on the hierarchy of creditors/stakeholders and some form of guarantee scheme – akin to the Financial Services Compensation Scheme – to ensure financial protection for stakeholders and to broker and secure progression of students to other providers.
Ramifications of institutional insolvency and regional impact
What would be the consequences of a higher education provider becoming insolvent?
The impact of institutional insolvency on students and staff would be vast. Students may be left unable to complete their courses with serious personal and academic consequences. Insolvency would harm access for commuter students and reduce local opportunities, worsening equity.
In regions with fewer universities, the impact on regional development would be more significant, potentially creating cold spots were certain subject areas are no longer available. In areas with greater competition between universities, applicants will likely gravitate towards those that have been more effectively managed. While this does reflect a response to the market, the increasingly tight financial margins make it difficult for universities to maintain long term sustainability.
Such a scenario would also result in a large loss of employment within the local workforce. Kingston University, for example, has 2,000 employees and is the largest employer in the borough. It is unclear how the needs of students, staff and other stakeholders would be addressed and how their interests would be safeguarded.
Naturally the wider impact of closure will vary by region, depending on how embedded each institution is in its local economy and community. Universities are often ‘anchor institutions’ within their communities:
University closure would have a substantial knock-on impact to local and regional retail, hospitality, contractors and sub-contractors.
There is also a heightened risk of insolvency for institutions actively working to address the national skills gaps in areas such as education, teaching and healthcare. These are high-cost, high-impact courses, yet they face significant funding pressures that threaten their sustainability.
More broadly, insolvency would contribute to a loss of confidence in the UK higher education sector, both domestically and internationally as it would be viewed as ‘unsafe’ and so would have implications beyond a local impact.
How do higher education institutions contribute to growth in their local economies, the provision of public services and their wider communities?
As stated above, higher education institutions contribute significantly to local economies through their own spending power and that of their students and staff, the provision of the skills needed by local employers and through a variety or knowledge exchange and student-focused projects, including volunteering within the community.
What strategies should be implemented to prevent insolvency and ensure sustainable regional provision of courses?
Fundamentally, there is a need for the government to establish a sustainable funding model for higher education. This is the root cause of the financial challenges facing the sector. Allowing universities to charge a fee that is reflective of the true cost of delivery is essential. Additionally, inflationary increases on tuition fees are needed to address growing pressures on affordability and access. Without these adjustments, institutions will continue to struggle to balance financial sustainability with quality and access.
These funding challenges have been compounded by government immigration policies, which have constrained the ability of universities to recruit international students. This cohort has traditionally helped to compensate for the erosion in the value of domestic tuition fees over time. Negative rhetoric around international students must also cease, as this significantly undermines the UK’s global appeal and reputation as a welcoming destination for study.
In response to growing financial pressures, universities are more likely to shrink than to face outright insolvency. This means making tough decisions—cancelling courses, reducing services and cutting investment. As a result, many institutions become less attractive assets for the UK economy and society. High-profile institutions may be better positioned to weather the storm, but the overall impact on research capacity, course diversity and the UK's attractiveness to students and talent is significant.
Furthermore, cost-cutting is expected to dominate university strategies. With squeezed finances, long-term investment in research and innovation is being lost—an approach that is short-sighted and risks undermining the development of the UK economy. Decisions are too often made without adequate consideration of their wider and long-term impact. Government policy currently overlooks the broader value of higher education, particularly in applied and creative fields. These fields are fundamental to the UK’s Industrial Strategy and central to regional economic development.
It may be possible for institutions to agree not to compete locally or regionally by offering similar courses, thereby helping ensure low-demand courses have sustainable recruitment pools. However, this would have implications for consumer law, would restrict student choice and possibly stifle innovation in course development through lack of competition. Equally, such arrangements would depend upon both parties recognising that neither had the upper hand in terms of student recruitment.
Teacher Pension Scheme (TPS) costs also threaten the sustainability of courses, particularly in post-92 universities, which disproportionately deliver applied and creative programmes and are vital for local access to higher education. Greater flexibility in statutory pension schemes would provide much-needed relief to institutions bearing the brunt of this financial burden. These same universities play a pivotal role in the public sector workforce pipeline. Alliance universities, for instance, educate 30 per cent of the country’s nurses, 33 per cent of midwives, and 12 per cent of all other allied health professionals, many of whom come from the local area and go on to serve in local NHS services.
Institutions provide courses in response to student demand. In some cases, there is finite national or regional demand which limits the market and therefore the number of providers that can operate sustainably. Where demand is low, duplication of provision becomes unfeasible. Similarly, the cost of specialist equipment and/or facilities can act as a barrier to offering such courses. In these cases, alternative regional provision may not be feasible if a provider withdraws.
To support workforce sustainability and address labour market shortages, a broader bursary scheme focused on areas experiencing skills gaps – such as healthcare-related training – could enhance recruitment and retention. Priority areas such as health, artificial intelligence (AI) and data science should be strategically aligned with the national Industrial Strategy, establishingregional clusters of expertise to ensure skills development meets future economic needs.
Expanding degree apprenticeships within a more permissive regulatory environment presents another opportunity for universities to diversify income streams while strengthening the talent pipeline. This is particularly important in technical and high-demand sectors. Such an approach should encompass qualifications across all relevant levels, including Levels 5, 6, and 7, to ensure clear and accessible progression routes into meaningful employment.
September 2025