There can no longer by any doubts that the university sector in Wales is in a financial mess, and it’s painful to write yet another column about the shambles unfolding before our eyes daily.
This week, Cardiff University announced inevitable job losses to address a £30m black hole, while Bangor University reported a £9m deficit, partly due to a 7% reduction in UK undergraduates and a 50% drop in postgraduate international students.
This follows an earlier statement from the University of South Wales (USW) that it expected to lose £23m in income, with student numbers forecast to decline.
USW Vice-Chancellor Dr Ben Calvert noted that international student recruitment could be 40 to 50% lower than last year, and the voluntary redundancy scheme implemented previously would not be sufficient and restructuring and consultations on redundancies with unions are expected before Christmas.
So far, other universities have been silent about their financial situations, but there’s no doubt that the sector is in deep trouble.
Rumours suggest that at least one university breached a loan covenant earlier this year, and another lacked sufficient funds to pay staff, resorting to emergency measures.
As a result, the higher education sector in Wales is expected to have lost around £100m in the last financial year and the collapse of the international market will lead to significant job losses, and some universities have already indicated a pay freeze for remaining staff.
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These actions, which senior management will claim are inevitable, are likely to erode any remaining goodwill from staff who are crucial to the success of universities through their research and teaching.
Could this crisis have been avoided, or were universities already in such a precarious financial position that the drop in international students was simply the final blow?
While universities now complain about frozen home fees, this situation has persisted for seven years with little lobbying or protest and many vice-chancellors seemed content to diversify into the lucrative international market, where students pay two to three times the fees of home students.
This strategy persisted despite warnings about over-reliance on a small number of countries, including China, India, and Nigeria for most of these students.
Back in May 2023, I warned that visa changes barring postgraduate overseas students from bringing their families to the UK would have a massive impact on recruitment, potentially leading to serious financial issues for Welsh universities. Unfortunately, no one heeded the warning, and the flawed recruitment strategy continued, leading to the totally predictable outcome we now face.
So, who is to blame for this?
Certainly, vice-chancellors and senior management teams should be held accountable for decisions that have led to staff redundancies due to poor strategic planning and, if they were leading private businesses, would be facing calls for their resignations.
However, there are also questions about the role of university governing bodies, which act as boards of directors.
Did they ask the right questions at the time, or, as some suggest, were they merely rubber-stamping decisions without proper scrutiny?
If this had been a business, the financial problems would have been the top priority on board meeting agendas and addressed immediately, yet in many universities there has been little intervention by governing bodies on these matters.
Then, if course, there is the Welsh Government which has been responsible for higher education for 25 years.
Despite numerous warnings over the past 18 months, there continues to a sense of denial and little urgency from politicians to address the financial crisis affecting a sector that is vital not only to Welsh society but also to the economy, the NHS, and other key areas.
Earlier this week, there were suggestions of a fund to support institutions in financial difficulties, but this would be merely a sticking-plaster for a much larger, long-term problem that is not going away.
While the UK Government has proposed increasing funding for home students, any change is unlikely to happen soon and will almost certainly fall short of what is needed.
Given this, a comprehensive review of the future of higher education in Wales is essential, including how the current funding model serves both universities and students.
But first, it must be determined whether the Welsh Government and universities view these institutions as independent entities or as major assets for Wales, with the potential to boost the economy if they work together.
If it is the former, they should not expect a public sector bailout just as any other Welsh business would not if it faced financial difficulties. If it is the latter, then addressing the funding issue alone won’t be enough and the sector must come together as one to develop a coherent future for Welsh universities.
This could involve collaborating more closely with employers to create lifelong learning opportunities for workers in Wales, introducing cost-saving measures such as shared services and course consolidation, and targeting emerging international markets collectively rather than competing for the same students.
Therefore, it is essential that not only a few lone voices speak out about the financial crisis facing a sector that is so integral to Welsh life.
Certainly, if we want a higher education sector that we can be proud of as a nation, then politicians, academics, and business leaders must unite to say enough is enough and that we need the universities we deserve as Wales will be a far poorer place in so many ways if this situation continues.