Written evidence submitted by Cranfield University (0060)
Education Committee
Higher Education and Funding: Threat of Insolvency and International Students
About
Cranfield University is a world-leading, specialist university with a largely postgraduate focus. Established nearly 80 years ago by Attlee’s Labour Government to address the UK’s urgent need to build expertise in aeronautical engineering, we have served the nation since by focusing on our specialisms of technology and management.
We have been the Ministry of Defence’s academic partner since 1984, delivering award bearing programmes in support of national security and sovereign capability. Our industry partnerships are long-standing trusted collaborations, where we bridge the gap with government. We operate from a main campus at Cranfield in Bedfordshire and as part of the MOD’s Defence Academy at Shrivenham near Swindon.
Q. How will Government policies affect the financial stability of Higher Education Institutions?
UK Universities continue to face an incredibly tough external outlook. As a specialist, largely postgraduate institution, Cranfield University is being disproportionally impacted by the current approach being taken by Government towards higher education providers. Our university faces a c£24.08 million drop in income and an additional c£4.4 million increase in expenditure. This represents a total impact of c£28.48 million.
The research and teaching we offer is crucial in supporting industry needs, driving innovation and helping the Government achieve its growth ambitions. This important activity is being endangered by the cumulative impact of current policy decisions and unfortunately, we have found DfE Ministers unwilling to engage.
The following polices are detrimental to Cranfield University’s financial position and we are now making difficult decisions about our future.
International students
Over the last two years, Cranfield has seen a 47% fall in international students.
While this is largely because of the last Conservative government’s decision to stop postgraduate students bringing dependant family members with them, the proposal in the recent Immigration White Paper to reduce the amount of time graduates can stay in the UK to work after they complete their studies to 18 months will further damage UK competitiveness.
International student fees have in the past have helped to pay for a range of research and teaching activities which benefit industry and society. This is now no longer the case. The proposal to make raise a 6% levy on all international student fees risks a further cost of c£2.3 million to us.
National Insurance
The change to employer national insurance contributions and the threshold at which these are paid has increased our costs by c£2.1 million.
Level 7 Apprenticeships
Cranfield is a large provider of Level 7 apprenticeships, working each year with over a thousand apprentices and hundreds of employers to provide programmes in management, engineering, sustainability, bioinformatics, and information technology.
The decision to remove funding from these programmes for all but the youngest apprentices will have a further negative impact on Cranfield – income from Level 7 apprenticeship programmes is worth around £6 million a year.
Total impact
In addition, reductions in the Strategic Priorities Grant (SPG) in 2025-26, will see us lose a further £185k in our total recurrent SPG grant from OfS.
When you combine all these elements, Cranfield University will face the following financial implications in the coming financial year:
Current impacts
Reduction in international student tuition income c£14.3 million
Reduction in international student residential income c£3.6 million
Additional NICs costs c£2.1 million
Reduction in strategic priorities grant c£0.18 million
Future impacts
Impact of Level 7 removal c£6 million
Proposed 6% levy on international fees c£2.3 million
TOTAL c£28.48 million
This creates an unsustainable financial position, and Cranfield is now taking urgent steps to safeguard its future and create a sustainable financial model. After a year of sustained cost cutting, this regrettably now includes reducing our academic and professional services workforce and cutting our course portfolio.
We have been told by Government that our work continues to be as relevant as ever and is vital to economic growth and industry innovation. However, such a significant reduction in income will now have serious impact on the shape and size of Cranfield going forward.
Q What implications will these policies have on future tuition fee increases?
The Government’s recent decision to raise undergraduate tuition fees as a mitigation for increased employer National Insurance costs at some universities will not benefit Cranfield because of our postgraduate focus.
The Government’s proposal to raise a 6% levy on international student fees would most likely be immediately passed onto all students, increasing the costs of courses for UK and international students. This will further damage the competitiveness of UK higher education.
Q How will the interaction between international student enrolment and tuition fees shape the sector’s financial outlook
For a largely postgraduate university like Cranfield, international student fees will remain an important stream of income.
The removal of funding for most apprenticeship learners at Level 7 and the impact of the other policy decisions as detailed above creates a challenging position for Cranfield. Any further change to the visa regime risks a further impact on the attractiveness of the UK in the global HE marketplace. Cranfield University does not benefit from undergraduate tuition fees, so we are focused on restructuring and resizing to enable us to focus on our areas of specialism and where there is potential for growth.
September 2025