/prod01/university-of-lincoln-cdn-pxl/media/responsive2017/Isaac,Newton,1706X960-1-1600X600.jpg )
Financial Position
Financial Position
We are proud to have been awarded triple Gold status in the latest Teaching Excellence Framework (TEF) 2023 and to win the Queen’s Anniversary Prize 2023 – the highest national Honour for UK universities.
These latest accolades recognise the quality of our teaching and research, and the positive impact this has on the lives of our students, our region, and the businesses and research partners we work with every day.
The University of Lincoln, like universities across the UK, is responding to financial pressures facing our higher education sector. This page explains more about the source of these pressures and the steps we are taking to continue to thrive now and in the future.
Last updated: 20 December 2024
Our Financial Health
The University of Lincoln is not in financial deficit. We returned a modest surplus in the last financial year, as we have every year bar one (during the Covid-19 pandemic) for more than a decade. We have ample liquidity to satisfy banks and regulators.
As a charity, any surplus we make is invested back into the University. To ensure we are well-placed to respond to financial pressures facing UK higher education, we are taking practical steps to balance our income and expenditure now and into the future.
Our latest Financial Statements can be found on our Finance Department’s microsite.
Source of Sector Financial Pressures
Home undergraduate tuition fees, which have not increased since 2017 and will remain frozen at £9,250 until 2025, are now worth a third less in real terms compared to a decade ago. This is the lowest real terms rate of student funding since the late 1990s.
On average, universities now lose money on teaching UK undergraduate students and undertaking government-funded research. In recent years, they have relied on other sources of income to stay sustainable, the main source being enrolments of international students who usually pay higher tuition fees than domestic students.
The number of international students coming to the UK fell substantially in 2024 due to government changes in immigration policy. Meanwhile, universities' costs are going up, from energy bills to employer pension contributions.
In January 2024 Universities UK, the body which represents university leaders, warned 40% of universities expected to be in deficit in 2023/24, rising to 80% in the coming years. Analysis by the higher education sector's regulator, the Office for Students, published in November 2024 forecast almost three quarters of universities could be in deficit in 2025/26.
For more on the financial pressures facing UK universities, see the Universities UK and PwC report, Financial Sustainability of the UK Higher Education Sector (January 2024).
Fit for the Future
The University of Lincoln is a university of, and for, the 21st century. The benefits we bring to our students and local communities are too important to let external pressures deter or distract us.
Our strategy states the ambition to be a UK top 40 university and a top 500 global university by 2027. Our sense of purpose remains as important as ever: to transform lives and communities.
We have been meeting the needs and aspirations of our region for decades. Our focus is to ensure that we are the right shape and size to be sustainable and successful now and as we move forward: to be fit for the future.
Our Priorities
The University has taken a series of steps to balance our income and expenditure.
This includes reducing non-pay budgets, lowering management costs, and streamlining departmental structures, as well as growing other sources of income.
The University ran a voluntary severance scheme and a voluntary redundancy scheme in spring 2024, and set a balanced budget for 2024/25 without any compulsory redundancies from this process. Information on what this means for staff can be found on the University's intranet.
Where any changes we make affect students directly, we will keep the relevant student groups informed, and engage with the University's Students' Union.
Frequently Asked Questions
Could the University fail financially?
We are fortunate to be in a stable financial position, having returned modest surpluses in recent years. This is not the norm: around 1 in 4 UK universities were in deficit in 2021/22 and 40% of universities are forecasting a deficit in 2023/24. Some universities have been in deficit for three consecutive years or more. As we look at the environment for higher education, it is difficult to see how, or when, the international student market will return to the levels we saw in 2022/23. The increase in the undergraduate fee cap announced by the new government in November 2024 has been largely offset by the pending increase in employers' National Insurance contributions. We must, therefore, continue to carefully manage our costs and increase income from other sources. This will ensure the University continues to thrive and serve its students and the wider community.
Why is the financial position of universities suddenly so precarious?
Most universities’ main source of income – the Home undergraduate tuition fee – has been frozen by the UK government at £9,250 since 2017 and will not be increased until 2025. High inflation in recent years means the fee is now worth about two thirds in real terms compared to a decade ago. A 3.1% increase in the fee cap in 2025/26, which the new government announced in November 2024, will not remedy almost a decade of real-terms cuts to per student funding. Increases to employers' National Insurance contributions will also add millions of pounds in extra costs to universities.
On average, universities now lose money on most undergraduate teaching (although this varies at subject and institutional level). Until recently, universities have partially covered the cost of these loss-making activities with the higher fees paid by international students but changes to immigration policies have seen a sudden decline in the attractiveness of the UK as a study destination.
Why aren’t universities demanding to be paid fairly for the cost of teaching?
Universities UK (UUK) and various other sector bodies have made the case to government that the UK higher education funding system is no longer sustainable. A report was released by PWC, commissioned by UUK, in January 2024 making it clear to government the challenges facing the sector, titled Financial sustainability of UK universities: PwC findings.
Prior to the UK General Election on 4 July, the University published its first ever manifesto calling on Lincolnshire's parliamentary candidates to support higher education in our region and recognise the role of universities in creating opportunity, enhancing productivity, and stimulating economic growth.
Will students be affected by any changes?
The University has been reviewing how efficiently we deliver our teaching, including our portfolio, assessment methods and student-to-staff ratios.
Protecting the student experience is an absolute priority and where any changes could have a material impact on students, we will consult locally and engage with the Students' Union.
We are also looking at how we deliver our Professional Services, across central services and colleges, more efficiently so that we can continue to support and enhance the student experience across all elements of our work.
Information and Support
For staff
More information for colleagues can be found on the Department of People, Performance and Culture microsite or the Strategy Hub intranet site.
For students
Support and contact information can be found on the Student Services microsite, or through the Students’ Union.