Governance News Alert: Universities UK (UUK): 2026 member survey — cost-saving and the Higher Education Policy Institute (HEPI): Demographic decline and predatory recruitment: The twin threats to English higher education into the 2040s

The UUK survey of more than 140 universities, now in its third year, was conducted between March and April 2026. It asked respondents where they have already made cuts due to financial necessity, and where they would consider future cuts if required. It repeats several questions from the 2025 and 2024 editions to enable comparisons. Some 48 members responded, 34 per cent of UUK's membership. The HEPI report, written by Bahram Bekhradnia, HEPI founder and former director, examines recent changes in university recruitment patterns and future demographic trends, and their implications for the sector. Points relating to the HEPI report are indicated with “HEPI”.

A press release on the UUK findings can be found here.

The HEPI report can be found here.

At-a-glance:

• Universities are stepping up collaboration, according to the UUK survey. 81 per cent are considering digital transformation, 71 per cent are open to shared procurement, 65 per cent are considering federations or alliances, and 2 in 5 are open to or actively considering mergers or acquisitions with other institutions
• 79 per cent of universities have pursued voluntary redundancies over the last three years. 38 per cent made compulsory redundancies in 2026, compared to 25 per cent in 2025. Nearly 80 per cent have implemented hiring freezes or pauses to recruitment
• More institutions report cuts to student support and research. 27 per cent have cut student bursaries and scholarships (compared with 15 per cent in 2025) and 31 per cent have made cuts to academic research activity (compared with 14 per cent in 2024)
• Changes to provision are widespread. Nearly half have reduced their course offering through consolidation and 44 per cent through closures. More than half have cut back on repairs and maintenance, 13 per cent have closed campuses, and 29 per cent would consider doing so in future
• The sector is calling for targeted support from the government: greater VAT flexibility and a government-backed Transformation Fund to cover the upfront costs of radical collaboration
• 18 to 20-year-old entrants make up around 80 per cent of the higher education (HE) intake. From 2030, this demographic will start to decline (HEPI p4)
• Unless participation begins to rise again, projections of future student numbers depend primarily on demographic trends rather than shifts in demand. That implies a reduction in total numbers across the sector of around 16 per cent between 2026 and 2042, and around 18.5 per cent between 2030 and 2042 (HEPI p6)
• Evidence from HEPI’s engagement with multiple governing bodies suggests this reality is not widely recognised. Strategic planning in many institutions continues to assume maintenance or even growth in student numbers (HEPI p6)
• Of the increase of 30,745 acceptances at higher-tariff providers between 2016 and 2025, around 30 per cent can be attributed to overall system growth. The remaining 21,400 reflect redistribution from other parts of the sector. In 2016, 15 per cent of admissions to higher-tariff institutions had lower grades, rising to 29 per cent in 2025 (HEPI p8, p11)
• Lower-tariff providers are exposed to the cumulative effects of redistribution, alongside a contraction in the young population from 2030. Reduced inflows, intensified competition and limited scope for further expansion create conditions of structural vulnerability (HEPI p14)
• If current trends persist, some form of policy response is likely to be required for system balance is to be maintained, and unplanned closures are to be avoided e.g. constraints on institutional recruitment. Such controls are not unprecedented: number limits existed for much of the 1990s and early 2000s (HEPI p21)

Implications for governance:

The UUK survey demonstrates the steps institutions are taking in response to significant funding pressures in a bid to safeguard their futures. These pressures have also recently been noted in reports from the Office for Students and the House of Commons Education Committee.

Nearly 80 per cent of providers have made staff redundant, and hiring freezes are commonplace. Governors may well be familiar with the oversight of these measures and the implications and potential risks they can pose to the student experience, staff workloads and morale and reputation. Academic research activity is also an area that has seen cuts, cited by 31 per cent of respondents. 

Other measures that directly impact students include cuts to student bursaries and scholarships and reductions in hardship funds (13 per cent of respondents indicated this compared to 9 per cent in 2025). As governors will know, such measures can have implications for student engagement and continuation.

The findings show changes to courses also remain widespread. Just under half of universities reported having reduced their course offering through consolidation or course closures over the last three years.

Operational cutbacks also remain common with over half cutting back on repairs and maintenance and some closing campuses.

Recent uplifts to the domestic undergraduate tuition fee cap were cited as having a positive impact on finances. However, most English and Welsh institutions said the fee uplift would not fully offset the financial impact of policy changes, including the increase in National Insurance contributions, changes to international student recruitment and pay and non-pay cost inflation.

While many providers have had to make significant cuts, the survey also highlights how the sector is finding creative, collaborative solutions, which governors may find noteworthy.

Universities are stepping up their efforts to unlock efficiency with digital transformation and shared services high on the list of options.

Only a small minority of providers have pursued large-scale structural change such as mergers or acquisitions with another university, but the survey shows that two in five institutions are open to or actively considering mergers or acquisitions with other universities in the future.

However, significant barriers limiting the progress universities can make on their own remain. Universities want greater flexibility over VAT and government support for the upfront costs of radical collaboration. To this end, UUK is calling for a Transformation Fund to ensure institutions can make real progress on these projects that will allow them to take control of their financial situation.

UUK also points institutions to its transformation and efficiency programme, aimed at sharing experience and best practice and facilitating access to specialist legal and financial expertise to support transformation programmes.

Moving into the next decade, more radical transformations of the sector may be necessary given the demographic and admission trends highlighted in the HEPI report.

It paints a picture of a shrinking intake pool and “encroachment” by higher-tariff institutions into the territory of lower-attainment school leavers who have traditionally found places at medium or lower tariff institutions. This combination of factors is predicted to create significant instability in the years up to 2030 and beyond.

According to the report, governing bodies have not widely recognised the implications of these forces: strategic planning in many institutions continues to assume maintenance or growth in student numbers, with limited consideration of the implications of demographic decline. Governors may want to consider the report’s recommendation that boards “should consider strategies that take explicit account of the demographic downturn after 2030”.

On a sector level, avoiding “adverse outcomes”, such as unplanned closures, could likely require explicit limits on institutional expansion, including the possible introduction of recruitment controls, according to the author.

“The central issue is not whether the system contracts, but how that contraction is distributed across institutions,” the report says.  “These findings raise important questions about the future structure, balance and stability of the sector. A system in which contraction is concentrated in particular groups of institutions is likely to become more hierarchical and less stable over time.”