Next government must make hard university funding decisions, fast

Labour sees no electoral gain in flagging sector’s funding crisis – but losses cannot be sustained much longer

• Ex-ministers say universities will go bust without higher fees or funding

Why are universities in such financial dire straits? According to one sector leader, it’s because they are losing money on two of their three income streams, while their third source is under attack by the government.

“We are already in a state where teaching home students operates at a loss, doing research operates at a loss, and the international student market has been diminished by the government’s rhetoric and policy. And those are the three areas where universities get their income,” said Rachel Hewitt, chief executive of the MillionPlus association of modern universities that includes Bath Spa, Wolverhampton and Sunderland.