Universities in England accrued record operating surpluses worth nearly £1.8bn last year, as their bank balances were filled by the first full cohort of students paying the £9,000 tuition fee.
The rise in university income in England outstripped those of their counterparts in other parts of the UK, with the University of Oxford boasting a larger surplus than the whole of Scotland’s university sector.
However, the higher tuition fee has further decimated the numbers of part-time and mature students enrolling, with the Open University announcing a £7m deficit and a further decline in numbers.
The record surplus, in official figures published by the Higher Education Statistics Agency (Hesa), follows two previous years of billion-pound surpluses within English higher education, encouraged by regulators at the Higher Education Funding Council for England to protect against future funding shocks.
In the last academic year, higher education providers in England spent a combined £25.9bn and took in a total of £27.7bn for a £1.8bn surplus for 2014-15 – well above the £1.1bn recorded each year in 2013-14 and 2012-13.
According to the Hesa figures, Oxford topped the premier league of universities with a surplus of £191m, while Scotland’s institutions combined for a total surplus worth £166m, of which about £100m belonged to the balance sheets on Glasgow and Edinburgh universities.
Imperial College London with £143m and Oxford were at the head of the pack, with Liverpool University in third place with a surplus close to £65m.
“UK universities do not make a profit. Any income they receive is spent on day-to-day activities, or reinvested for the future,” said a spokesperson for Universities UK, which represents the sector.
“A surplus is essential for universities to manage short-term fluctuations in income, from unanticipated changes to student numbers or unexpected costs. It is also needed for reinvestment in future capacity, including investment in new teaching spaces and research facilities, and refurbishment of existing buildings.”
The 2014-15 figures are the first year’s financial data that represent all three years of undergraduates since the advent of higher tuition fees in England in 2012, when the level was nearly trebled to £9,000 per year.
In England, tuition fees and similar education income has risen from £10bn in 2012-13 to close to £14bn in 2014-15, while spending on staff rose from £12.7bn to £14bn two years later.
Hesa’s accounts noted that the UK income figure included £500m of “exceptional income” derived from the research and development expenditure credit scheme.
The Hesa figures also revealed the extent of the troubles facing the Open University, which recorded a £7m deficit, the widest in Britain, a year after suffering a £17m loss and experiencing a sharp drop in enrolments.
While the tuition fee increase has been a boon for conventional universities, the Open University’s combination of distance learning and part-time study has lost its attraction.
Gordon Marsden, Labour’s shadow minister for higher education and a former Open University tutor, said: “The Open University announcement merely underlines the very fragile and worrying situation for lifelong learning in general and part-time higher education learning in particular.
“Drops in student numbers and the Open University’s losses are simply further evidence of the neglect and dire straits currently facing adult and part-time learners in higher education.”
The result has been rising income for English universities, unlike their counterparts in Scotland and Wales, where national governments have opted not to make their residents pay the higher fee to attend universities within their borders.