Universities face 'substantial cash hole' - academic

Students who received their A-level grades this week are crucial recruits for under-pressure universities

Some Welsh universities could be facing a "substantial cash hole" in their finances, according to an economist and academic.

Professor Dylan Jones-Evans said a combination of factors spell a bleak future should there be a failure to recruit enough students before the beginning of the new academic year in September.

The Welsh government said it "recognises the financial pressure higher education institutions are under" and that they have raised tuition fees in Wales to £9,250.

Prof Jones-Evans said several universities have been affected by an over-dependence on recruiting foreign students, the number of which have dropped dramatically in recent years due to student visa changes.

He told Newyddion S4C: "In the last few years there has been a clear strategy of targeting international students, which makes sense when you get roughly twice the level of fees than a home student.

"The problem now is that tap has been turned off thanks to the changes in the visa regulations - that's bound to leave a significant financial deficit in the coming year."

Prof Jones-Evans added that recruiting enough students over coming weeks could be crucial.

"One of the challenges in Wales is we have one high tariff university in Cardiff University," he said.

"The real challenge for those universities who don't have the cash in the bank is how much money they are going to generate in September, which is dependent on home and international students."

He said if Welsh universities failed to recruit enough students in line with their projections, some could face a “substantial cash hole”.

The number of international students have dropped dramatically in recent years

Assistant director of Universities Wales, Gwen Williams, agreed it is a difficult period.

"Universities' income hasn't risen with inflation for some time, and we have a funding system in place that doesn't cover the full cost of teaching domestic students or conducting research," she said.

"We absolutely need to look at a future funding model that is more sustainable for the sector, and what that looks like is a matter for the Welsh government."

In a statement, a Welsh government spokesperson said: "We recognise the financial pressure higher education institutions in Wales and across the UK are under, and the cabinet secretary engages regularly with sector leaders on this. 

"We have raised the fee limit for full-time higher education courses in Wales to £9,250 to reflect the increased cost of provision in universities.

"As universities are independent organisations they manage their budgets in a range of ways.

"The Commission for Tertiary Education and Research is closely monitoring the financial position of the higher education sector," they added.

"We recognise the important role universities have beyond their academia and business activities - they contribute to their local communities and support people across Wales through partnerships and projects."