The Cost-of-Living Crisis and Universities
The cost-of-living crisis is a significant challenge for the whole country, particularly as we move into the winter. This will only be compounded by recent economic uncertainty. Universities and their students and staff will be hit by this along with everyone else.
Impact on Students
Recent polling by Savanta ComRes for Universities UK shows that anxiety about the cost-of-living crisis is growing in the student population as they start the autumn term at campuses across the UK. Two thirds (67%) are concerned about managing their living costs this autumn. Over half of those polled (55%) are worried that this might prevent them from continuing their studies.
Postgraduate students – particularly those engaged in research – are more likely to be concerned about costs than undergraduates.
There are other student populations that may be particularly vulnerable, such as mature students- who are often managing families, work and other responsibilities. Commuter students are seeing their travel costs going up and international students currently have no access to maintenance support.
Action by Universities
Universities are, of course, doing everything they can to support those in hardship and ease the cost-of-living pressures they are facing, ensuring students can continue their studies. They are boosting financial aid and emergency support schemes, with several freezing or discounting rents for university-owned and managed accommodation.
Many universities are working with their student unions to understand where interventions can be best targeted and to provide advice and support on managing finances. Institutions are creating more affordable and free food options on campuses, providing food vouchers, and expanding and improving access to warm spaces to study.
Where possible they are creating and promoting more job opportunities on and off campus to help boost incomes for students. These are just a few of the many and diverse measures being put in place, and universities will continue to monitor the cost-of-living impact on their communities and do what they can.
Action by UK Research and Innovation
It is important, however, that universities, students and staff are not forgotten as the Government puts in place measures to help ease the pain on households and businesses. It’s good that we have seen some action on this already, such as the important intervention by UK Research and Innovation to raise the minimum stipend for doctoral students by 10% from 1 October.
More Action by Government Required
There is more that the Government can and must do. Universities UK has called for targeted government hardship funding for UK students. We also want to see the reinstatement of maintenance grants for those most in need, and action to ensure that support currently available for students is protected against inflation and adequately allows students to cover living costs. Maintenance loans have not increased by inflation for several years and annual living support for students is falling below the equivalent of the minimum living wage.
Impact on Universities
Universities will do all they can to help, but they will also be facing cost pressures.
Large Energy Intensive Organisations
As large, often energy intensive organisations, increasing energy costs will only add to this funding squeeze. BEIS has now set out details of how the non-domestic Government Energy Bill Relief Scheme will work for six months until March 2023, which provides a discount on the wholesale price of gas and electricity to all non-domestic organisations.
Government support in this area is helpful, but eligibility (and benefits) for higher education institutions remains uncertain due to the complexity and variety of business energy contracts in the sector. Many institutions purchase their energy through The Energy Consortium (TEC) and may not be affected as the price they have achieved for their energy is lower, but as the TEC have said, even at or below the capped price, energy will still be materially more expensive than organisations have been used to paying.
Institutions are seeking more efficient energy use as they meet green-house gas reduction targets, and a significant number are now generating their own energy through renewable sources.
Tuition Fee Freeze
The tuition fee freeze in England means that they are already operating with a severely stretched funding base and there will be limits on what they can do. Although there is a headline fee income of £9,250 per student, this has not been adjusted for inflation for several years and is now worth £6,600 in 2012 prices (when the fee was introduced). Direct non-fee funding to universities has also decreased by 78% in real terms.
Action by Universities UK
Looking ahead Universities UK will continue to identify gaps in wider government interventions and push those areas where students and staff could be better supported. We will also be promoting and sharing practice amongst our members.
Rent Reform
It will also be important that we are alert to other developments that have the potential to compound the cost-of-living challenges noted above. For example, the availability of affordable private rented accommodation could be negatively impacted by the Renter’s Reform Bill. This bill aims to give tenants on fixed term tenancies greater security of tenure, which is an important and positive protection. However, it does have the potential to disrupt a student accommodation market reliant on successive, predictable single-year tenancies.
Recommendation 1
DfE should increase hardship funding to allow universities in England to be able to provide targeted support where it is needed most. It is important that hardship needs are understood and addressed across the whole of the UK.
Recommendation 2
The Treasury and DfE should reintroduce maintenance grants for the poorest English students in full-time Level 4-6 higher education on top of full-time maintenance loans. Maintenance loans for full-time Level 4-6 should be fully protected from inflation to adequately allow students to cover living costs. Similarly, maintenance loans for part-time students on Level 6 degrees should be fully protected as well as maintenance loans for part-time Level 4-5 higher technical qualifications, when loans become available from AY2023/24.
Recommendation 3
It is essential that universities can benefit from wider measures to ease the cost-of-living crisis, including the Energy Bill Relief Scheme and a much needed extended programme of support from April 2023.
By Chris Hale, Policy Director, Universities UK
This article is part of Campaign for Learning’s series: Learning in the cold: The Cost-of-Living Crisis and Post-16 Education and Skills
Order of series
Day 1
Friday 21st October
- Louise Murphy, Economist, Resolution Foundation: The Cost-of-Living and the Energy Crisis for Households
- James Kewin, Deputy Chief Executive, Sixth Form Colleges Association: The Cost-of-Living Crisis and 16-19 Year-Olds in Full-Time Further Education
Day 2
Saturday 22nd October
- Becci Newton, Public Policy Research Director, Institute for Employment Studies: The Cost-of-Living Crisis and 16-18 Year-Olds in Jobs with Apprenticeships
- Zach Wilson, Senior Analysis Officer and Andrea Barry, Analysis Manager, Youth Futures Foundation: The Cost-of-Living Crisis and 16-24 Year-Olds ‘Not in Full-Time Education’
Day 3
Monday 24th October
- Nick Hillman, Director, Higher Education Policy Institute: The Cost-of-Living Crisis and Full-Time and Postgraduate Higher Education
- Liz Marr, Pro-Vice Chancellor – Students, The Open University: The Cost-of-Living Crisis and Part-Time Higher Education in England
Day 4
Tuesday 25th October
- Steve Hewitt, Further Education Consultant: The Cost-of-Living Crisis: Access to HE and Foundation Year Programmes
- Sophia Warren, Senior Policy Analyst, Policy in Practice: The Cost-of-Living Crisis, Universal Credit, Jobs and Skills Training
Day 5
Wednesday 26th October
- Paul Bivand, Independent Labour Market Analyst: Economic Inactivity by the Over 50s, the Cost-of-Living Crisis and Adult Training
- Aidan Relf, Skills Consultant: The Cost-of-Living Crisis and Employer Demand for Level 2-7 Apprenticeships
Day 6
Thursday 27th October
- Mandy Crawford-Lee, Chief Executive, UVAC: The Cost-of-Living Crisis and Employer Demand for Level 4+ Apprenticeships and Part-Time Technical Education
- Simon Parkinson, Chief Executive, WEA: The Cost-of-Living Crisis and Adult Community Learning
Day 7
Friday 28th October
- David Hughes, Chief Executive, AoC: The Cost-of-Living Crisis and FE Colleges
- Jane Hickie, Chief Executive, AELP: The Cost-of-Living Crisis and Independent Training Providers
Day 8
Saturday 29th October
- Susan Pember, Policy Director, HOLEX: The Cost-of-Living Crisis and Adult Education Providers
- Martin Jones, Vice-Chancellor and David Etherington, Professor of Local and Regional Economic Development, Staffordshire University: The Cost-of-Living Crisis – The Response of Staffordshire University
- Chris Hale, Policy Director, Universities UK: The Cost-of-Living Crisis and Universities
Responses