Higher Education Funding

James Naish Excerpts

Wednesday 28th October 2026 Westminster Hall

[Abtisam Mohamed]

I agree with the hon. Member. He makes an excellent point. I will come on to talking about disadvantaged students and the role that universities play.

Universities train the nurses and doctors who treat us. They train the teachers who educate our children, the engineers who build our infrastructure, and the researchers whose discoveries save lives. They support businesses, attract investment, create jobs and drive progress. In Sheffield we see that contribution every day. Sheffield Hallam University trains around 3,900 healthcare professionals and 2,800 teachers every year. In a single academic year, those healthcare students contributed more than 365,000 hours through NHS clinical placements.

Meanwhile, the University of Sheffield generates an estimated £4.82 billion for the UK economy and supports 138 start-ups and spin-outs. Its research activity contributes billions more in economic value. Although those figures are impressive, behind them lies a fracture point. There is a growing disconnect between what we ask our universities to deliver and the resources that are available. We want universities to drive growth to boost productivity, tackle regional inequality and undertake world-leading research. We want them to support the NHS, public services and local economies, yet the sector faces a financial crisis that threatens its very survival.

We have to recognise the failed funding experiments of the last 16 years and bring them to an end. I draw colleagues’ attention to the Education Committee’s comprehensive report from earlier this year, “Higher Education and Funding: Threat of Insolvency and International Students”, that identifies the real-terms cut in undergraduate tuition fees as a huge factor, though one of many, in financial instability. It is also widely recognised that the UK’s public education funding levels rank well below the OECD average of around 70%. Funding levels have fallen so far that funding direct to universities now makes up just £2 billion out of a total of £16 billion—the complete inverse of what it used to be. The majority of Government funding is spent on a bloated student loan system that is wildly out of control, while current repayment threshold freezes are punishing lower-earning graduates. Last year, the Office for Students forecast that up to 40% of higher education providers will be in deficit. Put simply, far too many institutions are being forced into a cycle of cuts just to temporarily balance the books.

[James Naish (Rushcliffe) (Lab)]

My hon. Friend will be aware of there being around 600 job cuts at the University of Nottingham. There have been alternative proposals from staff—120 in total—but the impact will be significant. What has been noticeable in my conversations with the university is the emphasis on commercial elements, whether that is covenants, 30 days’ access to cash or access to a revolving credit facility. Does she agree that that emphasis has gone too far? We have forgotten what the public benefit of universities is, and the Government and universities need to reflect on that.

[Abtisam Mohamed]

I agree with my hon. Friend; he makes an excellent point. Nottingham is seen as a university that needs support, and I think colleagues across the sector will look to see how Nottingham is supported alongside their own universities.

As I was saying, far too many institutions are being forced into a cycle of cuts just to temporarily balance the books. Over recent months, I have spoken to university leaders, staff, representatives of trade unions including the University and College Union, students and employers. While they all have very different perspectives, they all present a common diagnosis: the current funding model for higher education does not work. That raises a fundamental question: if we recognise universities as national assets, as our rhetoric often does, why have we systematically stripped back public funding and left them to shoulder so much of the financial burden themselves?