The Higher Education Funding Council for England said its analysis of the latest financial forecasts submitted by higher education institutions showed some could prove unsustainable by 2018-19 due to inadequate surpluses, declining cash levels and increased borrowing. …

… Financial forecasts to 2018-19 showed a widening gap between the lowest and highest-performing institutions.

Surpluses were projected at 2.3-4.3% of total income, which HEFCE called “relatively small margins in which to operate, particularly in an uncertain external context”.

Student number projections showed predicted growth of 10.3% among home and EU students and a 26% increase in fee income from international students, to £4.8bn by 2018-19.

HEFCE warned the sector might find these goals hard to reach due to a declining cohort of 18-year-olds, uncertainty about EU students’ long-term eligibility for loans and grants and potential changes to student immigration rules.

“These challenges, taken together, could have a significant impact on the sector’s financial projections, even if the currently weaker pound assists in the recruitment of international students in the short term,” HEFCE said.

Universities and colleges expect to invest £17.8bn in infrastructure over the next four years, 51% more than the previous four-year average.

However, within this total though nearly a quarter intended to cut their infrastructure spend, even though across the whole sector £3.6bn still needed to be spent to bring non-residential buildings to a sound condition.

HEFCE said the sector’s trend of falling liquidity and increased borrowing had continued with borrowing expected to exceed liquidity levels by £3.9bn at July 2019.