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Welsh universities ‘not at immediate risk of collapse’

21 May 2025 5 minute read
James Owen (L) and Simon Pirotte, chief executive of Medr

Chris Haines, ICNN Senedd reporter

No Welsh university is at immediate risk of collapsing under the weight of multi-million-pound deficits, according to the head of a public body set up to oversee post-16 education.

Simon Pirotte, chief executive of Medr, which was established in August, gave evidence to the Senedd education committee’s inquiry on issues facing higher education (HE).

Medr, which has a near-£1bn budget, is responsible for funding and regulating post-16 education and research – including colleges and sixth forms, unlike its predecessor Hefcw.

Mr Pirotte told the committee: “I think it’s fair to say… there are massive challenges facing the whole of the tertiary sector at the moment.”

He added: “It’s an incredibly challenging time for institutions across the tertiary sector, every part… HE, local authority schools, FE [further education] colleges, apprenticeship providers, adult community providers – they’re all facing financial pressures.”

‘Tension’

The former Bridgend College principal, who has been in education for around 40 years, emphasised that the “very challenging financial context” is not unique to Wales.

“Almost 100 institutions across the UK have announced restructuring measures,” he said. “So these are challenging times but it’s also essential that institutions cure their financial sustainability and continue to provide those best experiences for learners.

“And I think it’s fair to say that this requires some difficult decisions, including looking at prioritisation and efficiency measures… nobody wants to see job losses and I can say that as a former head of an FE college.

“I know how hard those decisions are and understand the tension between ensuring an institution’s financial sustainability but also considering the human impact.”

Appearing before the committee on May 21, Mr Pirotte told Senedd members he faced similar pressures previously, with increasing costs not met by an increase in income.

‘Scaling back’

“You have to identify additional sources of income and if that isn’t possible, you have to consider scaling back or stopping certain activities,” he said. “And this is the situation facing most institutions in Wales and indeed across the UK.”

Mr Pirotte explained that Medr uses externally audited financial statements to assess the challenges facing universities. “And we do not believe that any institution in Wales is at risk of failure in the immediate short term,” he said.

Pointing to data published by Medr last week, he said universities faced a £61m operating deficit in 2023/24 compared with a £21m surplus in 2022/23.

He told the committee: “This deficit of £61m does not account for the one-off restructuring costs. If you add that in you’re probably talking about a £77m deficit.”

Mr Pirotte, who attended Morriston Comprehensive School in Swansea, said more than half of costs in the sector are associated with staffing.

Cost pressures

“If we take a 2.5% annual pay settlement for HE, that estimates about £22m a year,” he said. “The increase in the employer national insurance costs, that’s another estimated… £20m.

“Employer contributions for teachers’ pension schemes, which particularly affects four of our institutions across Wales, is estimated to cost £6m a year.”

He also raised inflationary pressures, energy costs, increasing cybersecurity risks, a downturn in the number of international students and the loss of EU structural funds.

Mr Pirotte estimated increases in tuition fees to £9,535 a year will generate an additional income of about £36m “but this will not cover the costs”.

He warned that the UK Government’s contentious proposals on immigration have further fuelled concerns among providers around international recruitment.

‘Autonomous’

On proposed cuts to courses, he stressed that universities are autonomous with “subject provision driven by markets, by demand – what students want to study”.

Mr Pirotte said the Tertiary Education Act 2022, which established Medr, specifically states that the body must not use its funding powers to require nor prohibit certain courses.

Natasha Asghar, the Tory shadow education secretary, said: “Medr seems to be the answer to everyone’s prayers but when it comes to the nitty gritties… in relation to feedback to ministers: how much of it is going to be taken on board and actually acted upon?”

Mr Pirotte replied: “We’re certainly listened to – we have good, constructive dialogue.”

James Owen, Medr’s chief operating officer who is a former Welsh Government director, welcomed an additional £28.5m of in-year investment from ministers.

‘Meltdown’

Plaid Cymru’s Cefin Campbell, a former lecturer, questioned how close some universities are to going into administration. “How close are we to some sort of meltdown?” he asked.

Mr Pirotte reiterated: “We’re not saying there’s an institution that is in danger of falling over in the short term but there are medium- to longer-term challenges….

“This is not easy – the reason that they’re taking the actions that they are doing now is to prevent that falling over further down the line.”

Pressed by Ms Ashgar about whether he can see the £77m deficit growing, he said: “Yes is the simple answer but what we don’t know yet is the final impact of the kind of measures that organisations are taking at the moment.

“The future is really challenging… that’s why institutions are addressing the issues now – because they have to, otherwise that situation would get worse.”


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Cwm Rhondda
Cwm Rhondda
16 days ago

Falling over? We’re talking about people’s livelihoods, businesses, the long term future of Cymru. We’re living in an ongoing austerity world where we expect to have less and less. Universities are a key driving force of our future prosperity. We need to wake up and save our universities before it is too late.

Christopher Wood, PhD, JD
Christopher Wood, PhD, JD
16 days ago

According to the head of Medr, referring to Welsh universities: “You have to identify additional sources of income…” How about filing patents on research discoveries like Sheffield University does?      Sheffield is much smaller than all the research universities in Wales combined yet totally outperforms by a factor of at least five all Welsh universities combined (including Cardiff, Swansea, Aberystwyth, and Bangor) in terms of Intellectual Property (IP) value output. Sit down and have a cup of tea, Sheffield outperforms all Welsh universities at least five times over. (IP value output refers to all Total intellectual property income (including patents, copyright, design, registration and… Read more »

Peter J
Peter J
16 days ago

I’m not sure this is a fair comparison. Sheffield is a top 100 global university, whereas Wales has perhaps one institution in that bracket. Naturally, a university with stronger research capabilities will have a greater impact. Size matters, but so does quality. We need to raise stanadrds in Wales.. I studied at an elite Uni in the US, which has about half the undergraduate population of Aberystwyth, which I think is Wales’ smallest university, if I recall correctly. They generated around $2-3bn USD annually through IP. Its spin-out companies contribute nearly $2 trillion to the global econom, which is not… Read more »

Christopher Wood, PhD, JD
Christopher Wood, PhD, JD
16 days ago
Reply to  Peter J

Thank you very much for your reply. It is wonderful that there is a conversation on this long overlooked/urgent topic.     I do disagree with your contention that “you need to invest over 20, 30, 50 years.” For example, in the case of biotech Nobel Prize winner [Sir Martyn Evans] if patents were sought on to cover his fantastic discoveries at Cardiff university a tremendous flow of investment would have followed particularly if patents were filed in the USA, UK, Europe, Canada, Japan, and China. Literally hundreds or more molecular biology labs around the world use the techniques he developed.     It is… Read more »

Undecided
Undecided
16 days ago

Absolutely agree. Something that seems to get little coverage amongst the general wailing. Looks like Welsh universities are also over staffed?

hdavies15
hdavies15
16 days ago
Reply to  Undecided

Too many people with insufficient motivation. Some are genuinely under rewarded, others should be told to go elsewhere. Plain truth is that not all academics are talented

Christopher Wood, PhD, JD
Christopher Wood, PhD, JD
15 days ago
Reply to  Undecided

I’m in a rush, so excuse typos:     “Something that seems to get little coverage amongst the general wailing.”     You are right, patents are not seen as ‘sexy’ so the public and universities often pay ‘lip service’ to them – also, academics are awarded based on how many times they get published in learned journals; in fact this functions like a Cheetah racing for the finish line, in other words: promotion to more senior roles based on their publication rate.      So, the real question is how to crack/deal with this academic ‘model’/modus operandi?     One way is to… Read more »

James w
James w
15 days ago

‘Subject provision driven by markets’ – no cultural, intellectual, academic or civilisational dimension to universities then. That mentality I would submit is part of the problem.

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