Universities in Wales will get nearly £60m less in public funding for the 2022-23 academic year at the same time as record numbers of students have applied to study here. The Higher Education Funding Council for Wales (Hefcw), the body which funds and regulates higher education in Wales, will allocate £217.1m of public funding to universities and other higher education providers next academic year compared to £275.3m in 2021-22. The money comes to Hefcw from the Welsh Government .
Hefcw's allocation is not the only source of funding to universities. They also receive £9,000 for each full-time undergraduate student from the UK and the EU in tuition fees as well as income from international students, grants, and commercial activities. Universities in England receive £9,250 for each full-time graduate which has prompted calls in the past to raise student fees in Wales.
The news comes as record numbers of people have applied for university places in Wales starting in September. Date from admissions service Ucas shows more than 82,000 applications have been made for the 2022-23 academic year including 23,500 from Wales – a 3.7% rise on last year. You can get more education news and other story updates straight to your inbox by subscribing to our newsletters here.
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More than 38.1% of 18-year-olds in Wales have applied to go to university here or elsewhere next academic year and more than 12,000 international students – who pay higher fees than home students – have applied to come to Wales to study. Before the pandemic hit applications to Welsh universities were down but applications were predicted to rise this year owing to a number of factors including changes to the time tuition fees are paid back.
A Hefcw spokesman said this year’s funding should not be viewed as a drop but rather a return to normal after extra pandemic and some other extra funding during 2020-21 and 2021-22. In 2020-21 Hefcw originally had around £172m to distribute but one-off Covid and extra funding took that up to £311m in the pandemic year. In 2021-22 the original £206.5m allocation swelled to £275.5m including extra money for Covid costs, research, and net zero work.
The Hefcw spokesman said: “Additional in-year funding from the Welsh Government in 2021-22 meant that we were able to allocate £68.8m more than we had originally announced in 2021 as one-off rather than recurrent funding. This funding was provided to continue to support HE providers and students through the Covid-19 pandemic. Should any in-year funding adjustments be made by the Welsh Government to our budget and remit letter for 2022-23, as we have seen over the pandemic years, this would result in a revision to the funding distributed to providers in 2022-23.”
Figures released by the Welsh Government on July 22 this year, which cover the period from September 2020 to August 2021, show income and spending rose. In the 2020-21 academic year total income to the Welsh higher education sector rose 9% to £1.78bn compared to 2019-20. At the same time HE spending in 2020-21 soared to £1.71bn – 12% and £185m higher than in 2019-20. Income through tuition fees and education contracts, which accounted for 54% of income, rose to £970m.
Grants from funding bodies also rose by 51% from £220m in 2019-20 to £332m in 2020-21. Research grants in 2020-21 made up 13% of the income of Welsh universities – the same percentage as 2019-20.
At the same time there was an increase in the amount that Welsh universities have spent on staff – £970m in 2020-21 compared to £831m in 2019-20 – making up 57% of all spending.
A Welsh Government spokesman said: “We have allocated a total of £215,164,000 to Hefcw in 2022-23 to support higher education. This compares with an initial allocation of £213,503,000 in 2021-22 and demonstrates our ongoing commitment to the sector in Wales despite continuing financial pressures. During 2021-22 we provided additional funding in-year, via Hefcw, of around £60m to further support institutions to manage the impacts of the pandemic and to help progress delivery of programme for government commitments. The additional funding included support for health and wellbeing and improving ventilation.”
What each university’s budgets look like
Cardiff University
On its website Cardiff University says it has an annual turnover of more than £600m. The 2020-21 financial year saw the university retain an operating surplus of £31m, an improvement on the previous year’s £14m figure. After adjusting for one-off items the total surplus for 2020-21 was £59m.
Swansea University
Swansea University’s financial review 2021 showed that in the 2021 academic year it had income of £361m and spent £333m and ended the year with a £28m surplus.
Aberystwyth University
In its annual report and accounts for 2020-21 Aberysywth logged a £3.2m operating deficit, which it says is partly owing to loss of income, such as halls rent, during the pandemic. “Prior to the Covid-19 pandemic the university’s five-year financial plan had forecast a moderate surplus for 2020-21. The impact of the operating conditions on performances is reflected in the underlying operating deficit of £3.2million, a reflection of unavoidable income losses as well as some additional costs during that period.
“The pandemic has affected many areas of university operations, including refunded or lost student accommodation income and resultant rental underwriting obligations to third parties (£1.9m), deteriorating campus trading conditions across all areas including catering, sports facilities, arts centre, and conferencing (£1.8m). Some costs savings were delivered because of reduced activity on campus although these only partially offset losses.”.
Bangor University
Bangor’s annual report for 2020-21 said: “In the year to July 31, 2021, the university felt the significant impact of the coronavirus pandemic across all aspects of its activity. The shortfall in student recruitment led to a reduction in tuition fees of £6.6m, of which £4.2m was a reduction in international student fees.
“In response to the impact of the Covid-19 pandemic there were a number of additional funding streams made available to the university from the government, including funds for additional student support and a recovery fund. It is not anticipated that the majority of the additional funding will be recurrent. Further evidence of the impact of the pandemic is the £2.8m reduction in residences, catering, and conferences income. The reported deficit before tax for the year of £0.6m is affected by a number of factors during the year, including pension adjustments and the impact of the coronavirus pandemic.”
University of South Wales
In its annual report for 2020-21 the university says:
- Income has increased by 0.7% to £200.2m.
- Total expenditure fell by 2.5% to £194.4m.
- Operating surplus increased by £6.3m to £5.8m.
- Cash generated from operations increased by £36.6m to £59.3m.
- Net assets have increased by £20.7m to £75.4m
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