University finances: How to beat the funding crisis

November 3rd, 2014 Category: Colleges and Higher Education

Universities in the UK face a number of funding challenges, and have, over the last few years, been required to create innovative solutions in order to continue to offer a world-class service to staff and students.

Nviro recently produced a whitepaper which outlined these challenges, and examined the different ways in which universities were able to raise funds.

We also examined the role commerce and trading plays in procurement and development within an educational institutions, and some of the key issues associated with university finances.

Typically, universities get their funding from a number of sources. These include:

  • Tuition fees
  • Campaigns
  • Rent facilities
  • Run summer courses
  • Grants
  • Foreign students

Within the whitepaper, we took a look at all of these factors in detail and supported these findings with case studies of some of the UK's most prestigious institutions such as Oxford, the London School of Economics, City University and others.


The government's introduction of higher tuition fees has led to a reduction in the amount of domestic students. In fact, the Office For Fair Access revealed that there was a 17 per cent drop in the number of first-year undergraduates at UK universities in the inaugural year of higher tuition fees.

At the same time, the increasing costs that have to be paid by foreign students will undoubtedly have impacted the number of those choosing to study in the UK.

This coupled with the reduction in public grants available to universities has presented serious funding challenges to UK institutions.

As a result, many universities are forced to supplement their turnover by renting out their facilities, launching campaigns and hosting summer courses.

Importance of universities

What became clear from our research was the important role that universities play in their local communities.

Universities serve their local areas in a number of ways. Firstly, they are a major source of employment, and provide both skilled and unskilled occupations, such as tutoring, marketing, cleaning and consultation jobs.

They also provide facilities, talks and classes to the local communities in which they serve.

Despite the fantastic services they provide, these educational institutions have come under increasing pressure over the last few years, caused mainly by the decline in the number of public grants available, in addition to foreign and domestic students.

In our whitepaper, we take a look at these challenges in greater detail and outline the ways in which universities have overcome these obstacles.

University expenditure

However, any serious analysis of university funding challenges also has to consider the typical expenditure of British institutions and the impact this has had on both the service they are able to offer and its budget.

We uncovered several patterns that seemed to remain consistent with all of the case studies we looked at.

What we found was that staff and research costs were by far the biggest source of expenditure for most universities, although other costs such as facilities management and operational costs varied.

In many ways, this is to be expected. With institutions constantly striving to provide the best experience to staff and students, investment in teaching resources and academic studies will naturally be a priority for most institutions.

Our whitepaper examines all of these issues in further detail, and compares the different initiatives taken by universities across the UK.

Find out more about the issues discussed in our whitepaper by clicking here.