WELSH Universities face a serious threat to their financial position and may require further government support, according to analysis from Cardiff University’s Wales Governance Centre.

The report by Cian Siôn (https://cardiff.us3.list-manage.com/track/click?u=0d4d960f143e97b34536912ce&id=18abe2fb10&e=ec27c8d0d2) , a researcher on the Wales Fiscal Analysis programme, reveals a stark series of findings pointing to a dramatic loss of tuition fee income for the sector in Wales as a result of Covid-19.
Taking into account predicted falls in international student recruitment and home student enrolment, the report estimates that the sector could lose anything between £100m and £140m in 2020-21 from fee income alone.
The report analyses the financial health of the HE sector as a whole, finding that tuition fees account for £892 million (54.7%) of universities’ income in Wales, compared to 50.2% across the UK.
Cian Siôn said: “Taken together, pressures on student recruitment as a result of the Covid-19 pandemic represent a serious financial threat to the Higher Education sector in Wales. Several surveys point to a sharp drop in international and home student enrolment in September.
“Welsh institutions were already in a relatively weaker financial position before the crisis, so this is a blow that will be felt more acutely here.”
The report also reveals the sector’s relatively greater importance to the Welsh economy compared to England or the UK, with universities providing 17,300 full-time Welsh jobs, contributing 4.8% of GVA and accounting for 32.5% of the country’s Research & Development (R&D) spending. Previous research from the Wales Fiscal Analysis programme has found that increasing R&D spend in Wales is critical to improving the nation’s economic performance.
The UK Government’s general economic response measures may help institutions facing an immediate shortfall in funding. But the sector’s reliance on fee income from multi-year programmes means the effects of a smaller student intake in September will likely be felt for several years. In the absence of further government support, operational challenges could ultimately lead to job losses and a shrinking of the sector in Wales.
According to the analysis, the three institutions with potentially the most to lose if there is a fall in international student recruitment are Cardiff University, Cardiff Metropolitan University and Bangor University. And the three institutions with potentially the most to lose if there is a fall in “Home” student recruitment are Glyndŵr University, University of Wales Trinity Saint David and Cardiff Metropolitan University.
Cian Siôn added: “Governments in both Cardiff and Westminster will be carefully considering which sectors most urgently require additional support in order to withstand the effects of the pandemic.
“We hope that these findings clarify the importance of the Higher Education sector to the Welsh economy and that without some kind of tailored support package, there may be a serious financial threat to most universities in Wales.”

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