The University of South Wales (USW) is facing a projected £20m financial shortfall in its current financial year and has not ruled out redundancies to help address it, while also confirming it will draw on reserves. The university, like the wider higher education sector in Wales and the rest of the UK, is facing a challenging financial environment with falling international student numbers that have offset loss-making domestic students, where tuition fees have been capped at £9,250 per academic year, for a number of years.
The Welsh Government only recently increased the domestic fee level to align with the rest of the UK. Higher fee-paying international student numbers have fallen since the introduction of stricter visa rules for family members of postgraduate students at the start of the year. The new Labour government has no current plans to enact a U-turn on the policy of the former Tory administration. The new rules, in particular, have significantly impacted student numbers from Nigeria, with a 68% drop in UK student visas granted to Nigerians in the first half of this year.
USW, according to the latest figures, had 2,065 Nigerian students – the highest of any Welsh university. In its last financial year, the university, with campuses in Treforest and Cardiff, was faced with a £6m deficit. It launched a voluntary redundancy programme – as many universities have – earlier this year. So far, 100 staff have left after agreeing on redundancy settlements.
USW said its projected £20m financial shortfall for 2024/25 could be addressed over a number of years, due to its significant financial reserves – as it aims to get onto a more sustainable financial footing. It wouldn’t give a current reserve position. Its accounts for 2023-2024 are in the process of being audited. However, accounts for 2022-23 showed it had total net assets of £273.6m, including at the start of the year cash and cash equivalents of just over £59m.
The university wouldn’t disclose its new student intake number for the just-commenced 2024/25 academic year and where the numbers stood in relation to the target. Latest official figures from the Higher Education Statistics Agency, for the 2022-23 academic year, showed it had just over 26,000 full-time and part-time students, of which around 18% were overseas. For full-time students (19,290), foreign students made up around 35%.
A spokesman for the university said: “It is an incredibly challenging financial climate for the whole high education sector and like many institutions, we are facing a deficit budget this year. We are predicting a shortfall of £20m in 2024/25 if no action is taken. However, we are not expecting to make up this deficit in a single year and instead have a planned programme of transformation, which we are already working to deliver, that will take us closer to achieving the aims of our 2030 strategy while also providing a sustainable financial position.
“USW’s strong reserve position means that we are able to take time to consider our options and operationalize this plan effectively. It is likely that this will include some redundancies, however, we are unable to provide any further details at this stage.” The university wouldn’t be drawn when asked if any redundancies could be compulsory.
A spokesman for the University and College Union (UCU) in Wales said: “We are continuing to work with universities in Wales very closely. However, any compulsory redundancies would be unacceptable.” According to its financial accounts to the end of July 2023, USW employed nearly 2,200. Staff costs of £124.8m accounted for 53% of its total income of £233m. The university recently started construction work on a multi-million-pound computing, engineering and technologies building at its Treforest campus.