Thirty Days in the Bank

How Britain’s universities are running out of money, and why almost nobody is shouting about it

Up here in the hills, you learn to count in days. Not in pounds, not in quarters or fiscal years, but in days: how many days of gas are left in the bottle, how many days the batteries will hold if the sun decides to sulk behind the Sierra for a week, how long the water will stretch if nobody gets precious about washing up. It’s an old habit, and I suspect it started long before the cave. A service childhood teaches you that everything is temporary and should be counted accordingly, and a career in RAF Police and security management teaches you that the things which fail catastrophically are almost always the things somebody stopped counting. So when I came across a figure buried in a regulator’s report, I read it twice, then went outside and looked at the mountains for a bit, because it was the kind of number that deserves a moment’s silence.

The number is thirty. As in thirty days. As in the point at which an institution has less than a month of cash in hand before it can’t pay its bills. Office for Students modelling suggested the number of English higher education providers reporting net liquidity of under 30 days could rise from 41 to 45 in 2025-26. Forty-odd universities, colleges and specialist institutions, the places where we send our children and grandchildren to become cleverer than us, are operating with roughly the same financial cushion as a family living payday to payday. I’ve known squadrons run on tighter margins than that, but they had the Treasury behind them, and nobody seems entirely sure these days who’s standing behind the universities.

The slow collapse nobody wants to film

I want to be fair to the mainstream press here, because it isn’t that nobody has reported this. The Office for Students publishes its figures, the specialist sector outlets pick them apart with admirable diligence, and every so often a national paper runs a piece about a much-loved course being axed. The problem is the shape of the story. Institutions rarely collapse with a bang; they erode, quietly, one voluntary severance scheme and one “portfolio review” at a time, until the day the lights go out and everyone acts astonished. A war gets a live blog. A sector bleeding out over five years gets a paragraph on page fourteen, somewhere between the weather and an advert for stairlifts.

Here’s the backbone of it. The regulator’s annual report in May found that more than a third of institutions, 35.8 per cent, reported a deficit for 2024-25, a figure forecast to climb to four in ten, 42.7 per cent, for 2025-26. The report’s headline, and I promise I’m not making this up, was a warning against “persistent over-optimism”, which is the polite regulatory way of saying that universities keep submitting forecasts in which next year is lovely, and next year keeps turning up looking exactly like this one. Recruitment for autumn 2025 did grow, but by less than the sector had forecast, which the OfS estimated could leave tuition fee income £437.8m short of what institutions had pencilled in. Nearly half a billion pounds of hope, gone in a spreadsheet.

And lest anyone think this is just the gloomy imaginings of a retired copper in a cave, Parliament has already said the quiet part out loud. The Education Committee concluded after its inquiry that the sector faces a real risk of institutional insolvency, that there is a clear possibility of a university closing, and that the consequences would fall heavily on students, staff, local economies and the country’s academic reputation. A select committee of MPs, not known for its taste in melodrama, used the word “insolvency”. If that doesn’t make the front pages, I’m genuinely curious what would.

A business model held together with foreign money and good manners

The absurdity at the centre of all this is so simple that it almost sounds like satire. The British university, as currently arranged, loses money on the thing it exists to do. Capped domestic fees have been worn away by inflation while wages, utilities and compliance costs rose sharply, so universities increasingly teach at a loss and rely on international students and research contracts to cross-subsidise the whole enterprise. Research, which you’d imagine would be the jewel in the crown, is worse still. For every £1 spent on research in UK universities, only 67p comes back through grants and contracts, leaving a shortfall of £6.2 billion, and for years that hole has been quietly filled by the fees of young people who flew in from Lagos, Delhi and Beijing to study in Leeds or Coventry.

So think about what happens when those young people stop coming. Home Office data released on 10 September showed 99,500 applications for UK study visas in August, the single most important month for international recruitment, which was 17 per cent lower than 2025 and 32 per cent lower than 2023. August was the eleventh consecutive month in which applications fell year on year. Eleven months in a row. That’s not a blip, that’s a trend with a pension plan. For two years, successive governments have signalled, sometimes subtly and often not subtly at all, that overseas students are a migration statistic to be managed down rather than guests to be welcomed, and it turns out that ambitious eighteen-year-olds with other options can read a headline just as well as the rest of us. Australia and Canada are right there, and they’re not making anyone feel like a problem to be solved.

I’m not going to pretend there’s no argument on the other side, because there is, and it isn’t a stupid one. Immigration numbers matter to a great many people in Britain, and a university sector that grew fat on an overseas fee model was always going to be vulnerable to a political mood swing. But you can’t spend a decade building a system in which foreign students subsidise British teaching and British research, then act surprised when turning off the tap floods the basement.

The levy, or how to hit the middle and call it fairness

Then comes the bit that genuinely made me put my coffee down. Having watched international applicants fall for the best part of a year, the government has decided to tax them. From 1 August 2028, higher education providers in England will pay a flat £925 per international student per year, collected by the Office for Students and reinvested into higher education and skills. The stated purpose is to fund maintenance grants for disadvantaged UK students on courses aligned with the government’s industrial strategy. On paper, it’s rather lovely: take a little from the foreign fee income and give it to the kid from a council estate who can’t afford to eat while studying. It’s the kind of policy that reads beautifully in a press release and makes a Treasury minister feel like Robin Hood.

The sector was not charmed. Speaking at a Higher Education Policy Institute forum in July, Durham’s Vice-Chancellor Karen O’Brien called the levy “absolute insanity” and urged the government to take it off the table. Vice-chancellors are not, as a breed, given to that kind of language. They’re usually the sort of people who describe a building on fire as “a significant estates challenge”.

But it’s the detail that tells you the real story, and the detail is where my old professional instincts start twitching. Opting for a flat £925 rather than the percentage charge first floated limits the damage to institutions charging the highest fees, while exempting each provider’s first 220 international students means many small and specialist institutions avoid it altogether. Follow that logic to its conclusion. The elite, the ones with the global brands and the endowments, are cushioned. The tiny are spared. And who’s left holding the bill? The ordinary, mid-sized, civic university in a post-industrial town, the one that educates the nurses and the engineers and the first-generation students, the one that is often the largest employer for miles around. It’s a class story wearing an academic gown, and it’s been waved through with barely a murmur.

What the cuts actually look like

Numbers can numb you, so let me try to put some faces on it. An analysis of published accounts by Times Higher Education found universities shed 13,300 jobs through severance in 2024-25 alone, with cumulative losses nearing 30,000 over three years. Thirty thousand people. That’s a decent-sized market town’s worth of lecturers, lab technicians, librarians, admissions staff and the cleaners who kept the place running at six in the morning, all shown the door, quietly and politely, with a severance letter and a leaving card.

And the knowledge goes with them. Course closures are spreading across the humanities, languages and niche sciences, with Leicester axing film studies. Nobody sat down and decided, as a matter of national policy, that Britain needs fewer linguists or fewer people who understand cinema. It’s simply happening, department by department, because the spreadsheet says so. We’re rewriting the country’s intellectual inheritance by accountancy, and nobody was asked.

I spent twenty-six of my sixty-six years in Hull, and I still carry the city about with me like an accent I can’t quite lose. So I noticed, with that particular ache you get for places that formed you, that in 2024 the University of Hull set out plans to cut up to 127 staff, including 95 academics, only months after a voluntary severance scheme had already seen 107 people leave. The same institution had borrowed heavily to go carbon neutral, only to be told by the National Grid that it couldn’t accept the electricity from its planned solar farm until 2034, making its target of carbon neutrality by its centenary year of 2027 impossible. The university turns a hundred next year. A centenary arriving in the middle of all this feels like a Hull sort of irony… the kind of city that has always known how to throw a party with half the budget and none of the sympathy from London.

Why it matters more than it looks

It’s tempting, especially if you’re of a certain political persuasion, to shrug and say that Britain has too many universities anyway, that too many young people are being sold degrees they don’t need, and that a bit of creative destruction might do the sector good. There’s a grain of truth in that, and I’ve heard it argued with real conviction by people I respect. But the romantic idea of a clean, rational pruning, where only the useless courses and the bloated administrators disappear, has never once matched how institutional decline actually unfolds. What really happens is that the places with the least money, the least prestige and the most vulnerable students go first, and the damage lands on the towns that can least afford it. Universities are major economic drivers, creating skilled jobs and sustaining local economies through student and staff spending. When one fails, the landlords, the cafés, the bus routes and the local tradespeople feel it too. It isn’t just an ivory tower falling over; it’s a high street.

What unsettles me most is the silence around it. In security work, you learn that the dangerous period isn’t when the alarm is going off; it’s the long stretch beforehand when everyone can see the warning signs, and nobody wants to be the one to escalate. The reports have been written. The committee has sat. The regulator has warned, repeatedly, in the kind of language regulators use when they want to be able to say “we told you so” at the eventual inquiry. And the government’s big response has been a tax on the one income stream that was keeping the lights on.

Counting the days

I don’t have a neat solution, and I’m suspicious of anyone who says they do. More public money would help, but there isn’t much of it, and every pound has three other queues waiting. Welcoming international students again would help, but it runs headlong into a migration politics that no major party currently dares to cross. Mergers and closures will probably happen regardless, and some of them may even be sensible. What I do know is that a country which lets its universities hollow out by stealth, without ever having the honest public conversation about what it wants them to be for, is going to wake up one morning to the news that one of them has simply stopped, and everyone will say how shocking it is, and how nobody could have seen it coming.

Up here, when the gas bottle gets low, we don’t wait for it to run dry before we drive down to town. We count the days, we say it out loud, and we act before the cooker goes cold. It isn’t wisdom, exactly. It’s just what happens when you can’t afford to pretend. Somewhere in England tonight, a finance director is looking at a number with thirty days in it, and I wonder how many of them are saying it out loud… and how many are still waiting for next year to be lovely.

Until Next Time