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 growing 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.

Due to the changing economic and political situation, we will update this page as new information becomes available.

Last updated: 15 July 2024

Our Current Financial Health

The University of Lincoln is not in financial deficit. We returned a surplus in the last financial year (2022/23) and grew our revenues. We have returned surpluses every year, bar one (during the Covid pandemic), for more than a decade.

As a charity, any surplus we make is invested back into the University. We have ample liquidity (cash) to satisfy banks and regulators. However, the ongoing freeze in tuition fees combined with volatile international student demand and high inflation means our costs are now rising faster than our income — a familiar picture for universities across the country.

To ensure we are well-placed to respond to these economic headwinds, we are taking practical steps to reduce our expenditure. We expect to achieve a financial breakeven position or a very small deficit in 2023/24 (the university financial year runs from August to align with the academic year).

Our latest Financial Statements can be found on our Finance Department’s microsite.

Source of Sector Financial Pressures

The 2024/25 academic year poses greater challenges for universities to balance their budgets.

Home undergraduate tuition fees, which have not increased since 2017 and will remain frozen at £9,250 until at least 2025, are now worth a third less in real terms compared to a decade ago.

On average, universities now lose money on teaching UK undergraduate students and undertaking government-funded research. They increasingly rely on other sources of income to stay sustainable, the main source being enrolments of international students who pay higher tuition fees.

The number of international students universities expect to enrol in 2024/25 is uncertain due to recent government changes in immigration policy. Current indications are that it is unlikely that international enrolments in 2024/25 will be higher than 2023/24. Some universities are forecasting significant drops. Meanwhile, costs are going up, from energy bills to employer pension contributions.

According to Universities UK and PwC, around 40% of UK universities forecast financial deficits this year, and this could rise to 80% next year.

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 overtake us.

Our strategy states the ambition to be a UK top 40 university by 2027. This vision remains valid and achievable, and 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 now is to ensure that we are the right shape and size to be sustainable and successful: to be fit for the future.

Our Priorities

The University has taken a series of steps to reduce our expenditure in 2024/25.

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 the spring, and has now 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 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. There is also no sign of an imminent increase in tuition fees and other income from students is constrained by the need to ensure the University remains affordable to all. We must, therefore, take pragmatic steps to reduce our costs and increase income from other sources. Taking action now 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 at least 2025. High inflation in recent years means the fee is now worth about two thirds in real terms compared to a decade ago.

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. The first impacts were felt in September 2023 and repeated in January/February 2024 intakes across the sector.

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 will be 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 can continue to 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, including ways to find support and give feedback, 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.