9 April 2026
Its not newsworthy to highlight that the Higher Education sector has been and is under significant financial pressure. Factors include the level of domestic tuition fees, which until last year hadn’t increased since 2017; declining and volatile international students numbers – in part due to changes in visa and post study rules; and inflationary pressures with rising energy, infrastructure, and staff costs all playing a role.
From the outside as a Consultant supporting the sector the picture looks bleak – but what does it feel like on the inside? How challenging is it to balance the needs of a Higher Education institution with prudent financial management?
I decided to discuss my thoughts and concerns with an interim CFO/FD who has worked in numerous institutions and can give me an insight into what its like at the coalface. I’m delighted to share my interview with Nirmal Borkhataria, who has operated an interim CFO/FD at numerous institutions including Edinburgh, York, Queens Belfast, Queen Mary, Goldsmiths and others.
How would you sum up the current financial position in the sector?
Institutions are operating under what is basically a structurally unsustainable financial model. With the number of institutions running in deficit increasing year by year, challenges with low cash generation and a heavy reliance on international students. Overall student numbers are also becoming a bit stagnant, falling and volatile for many. If things continue in this vein there could be ‘failures’ in the future. Its estimated a quarter of universities probably have less than 30 cash days, and many more less that 50 cash days.
Swings in international domestic recruitment is very problematic leading to real financial issues – institutions having to restructure their debt, which itself is becoming more expensive. We need a significant change by the government, whether it’s a reset to fund domestic students, or the general approach to international recruitment.
Recently I’ve mostly ended up going from institution to institution delivering significant cost reduction programmes which sadly seems to be a never-ending feature of the sector.
Given what you’ve shared what are your thoughts on the changes needed in the sector?
There are various discussions taking place in the sector whether it’s a hike in domestic tuition fees, alternatives include the introduction of a Graduate tax, a flat fee for certain subjects, and government top-ups for other subjects. Many Vice Chancellors individually as well as part of lobbying groups, such as Universities UK and Russell group – are all targeting the right people to have the dialogue, but no one in Government is coming up with anything concrete to discuss… the can continues to be kicked down the road.
As an aside another area for universities to focus on is governance. There isn’t enough challenge provided by the governance function to poor business cases, particularly when it comes to large-scale infrastructure project investment. Members of the board meet perhaps four or five times a year and have to go through a 200 pages+ pdf pack – they don’t have enough time to properly scrutinise business cases. Governance needs to be stronger on pushing back whilst at the same time supporting the Senior Leadership structure.
Let’s say you’re in charge and there was one single change you could make what do you do?
You’ve got to make changes to domestic student fees and increase research funding, the latter is a platform for all our great institutions. The government have taken a very small step by saying tuition fees are now inflation linked for the life of this parliament, but what they haven’t addressed is the fact that it was frozen for eight years. They need a mechanism of how they’re going to fill some of that gap. Is it a graduate tax? Is it a one-off hiking tuition fee?
What is your approach as an interim when you join a university?
In all my assignments I’ve not rushed into decision-making – you’ve got to step back and analyse. Understand what needs to be done to arrive at a sustainable financial model before offering options.
You must have a long and considered discussion with the Senior Leadership Team, other management layers and at the governance level. Determine time scales for actions and how best to cascade and communicate information. Even then you won’t get everybody buying in, but at least they understand the situation. Information sharing is vital otherwise people create their own story.
Even when you arrive at a plan to get to a financially sustainable position there will be surprises outside of your planning, external and internal for example the recent National Insurance hike, or the post study work visa’s being reduced that you have to suddenly factor in and make tweaks to plans.
Ultimately you need to be bold and say when you’re in a cost production program. Don’t be intimidated and develop a thick skin when faced with unexpected internal and social media backlash.
What is the most difficult situation you’ve had to deal with?
There was one assignment where the VC and a large part of the executive really didn’t understand the institutions financial position. They didn’t realise within the space of two or three months, they were going to run out of cash. I had to have rapid discussions internally and externally, particularly banks, to initially bridge the challenge until analysis and solutions were developed.
How supportive is the SLT and importantly the VC when you’re having to make difficult decisions?
If I look back at all my assignments, I always make it very clear that it’s their decision I’m primarily an advisor. I’m presenting the information and options. They’re going to be the public face, delivering the message beyond my tenure.
Almost inevitable, after I have finished my role as an interim, they will still be implementing the options. I see my role when in post to support them, provide all the necessary information and be involved in all the discussions.
I’ve noticed the Russell group institutions are more adept at understanding information and implementing actions, this isn’t a slight on other universities, they simply have larger teams, and are usually larger institutions.
We’ve seen a couple of mergers the last few years City St Georges, and obviously this year with Kent and Greenwich – do you feel that’s going to be a pattern?
The mergers are partially financially driven, as well as parts of some institutions failing for academic reasons. The government made a seismic decision with further education colleges which led to mergers, the implementations however weren’t always successful. In the case of higher education currently government can’t intervene in the same way.
More broadly universities unlike colleges are significant players in their city and region, they can’t fold, they provide for example the teachers for schools, nurses and health professionals for the NHS etc. Many universities are the anchor point and have an enormous impact on local communities so are unlikely to fold with government intervention likely.
Mergers may happen however due to financial challenges.
What do you feel the green shoots you’re seeing in the sector? Are there reasons to be optimistic?
I believe so, institutions are more resilient, better equipped and more agile to adjust to changes and challenges. Importantly universities haven’t forgotten the impact they have in a local area and know what their purpose is.
I think there’s better information flowing in universities, and there is better sharing of information as well. There is better dialogue between the institutions and the financial institutions which support them. I also think the lobbying of the last two or three years has meant government is far more aware of the challenges.
The sector is incredibly strong and resilient at finding solutions so there is cause to be optimistic. There have been painful decisions such as job losses, sites closures, general sale of assets, or programmes being closed.
Despite this UK is still one of the biggest exporters of Higher Education in the world!
Thank you, Nirmal Borkhataria for your time and contributions. An interesting insight into how difficult and challenging Higher Education has been, what steps need to be taken to improve the situation and how despite the gloom there are positives to take from how the sector has responded to challenges.
Middle Management: A Balance of Strategy and Action | AQ
Az Ahmed is a Senior Consultant with over ten years supporting the public sector in local and central government as well as higher education. He is guided by his desire to support higher education institutions in appointing credible, transformational leaders who drive forward change. You can contact him at az.ahmed@andersonquigley.com or connect with him on LinkedIn.
