We Can’t Just Cut Our Way Out

Across UK higher education, transformation has become one of the most frequently invoked — and most misunderstood — terms in senior leadership discourse. Institutions are restructuring, redesigning services, rethinking portfolios, and revisiting long‑held assumptions about how universities operate. Yet, amid intense financial pressure and regulatory scrutiny, a harder question is often left unasked: what actually makes change transformational, rather than merely reactive?

This is no longer a marginal or cyclical problem. The Office for Students reports that 43 per cent of universities forecast a deficit in 2024–25, marking the third consecutive year of declining financial performance across the sector. Analysis suggests the picture may worsen further, with up to 72 per cent of English providers potentially in deficit by 2025–26 if mitigating action is not sustained. These are not isolated failures of management or demand; they are symptoms of a system under structural strain.

Unsurprisingly, many institutions have responded by cutting costs, restructuring teams, and reducing activity. In some cases, these actions are unavoidable. But cost‑cutting alone is rarely transformational — and, pursued in isolation, can actively undermine the resilience universities now require.

As Professor David Maguire, Vice‑Chancellor of the University of East Anglia, has observed, the sector is now living with the consequences of repeated retrenchment: As Professor David Maguire, Vice-Chancellor of the University of East Anglia, warned in late 2024, universities across the UK are grappling with deep and repeated cuts, with each successive round making future decisions harder rather than easier (Maguire, 2024). The cumulative effect is not renewal, but erosion — of capacity, confidence and institutional memory.

Universities cannot cut their way out of structural challenge. Nor can they grow or spend their way out in isolation. Higher education is built on intersections. Cutting student support capacity may deliver short‑term savings, yet even marginal declines in retention or progression can rapidly outweigh those gains. Thinning academic or professional capability may stabilise today’s budget while undermining tomorrow’s recruitment, delivery or regulatory assurance.

The underlying economics explain why this pattern keeps repeating. In England, the real‑terms value of undergraduate fee income has fallen by around 18 per cent since 2012–13, leaving funding per student at its lowest level in more than 25 years. At the same time, staff costs, estates pressures, pension obligations and digital infrastructure demands have risen faster than income. The result is a persistent mismatch between what universities are asked to deliver and what the funding model can sustain.

Professor Sally Mapstone, Vice‑Chancellor of the University of St Andrews and President of Universities UK, has been explicit about the implications. Professor Dame Sally Mapstone, President of Universities UK, has stated that the full economic cost of teaching is no longer met by tuition fees and public funding alone, leaving universities increasingly reliant on cross-subsidy and efficiency to sustain provision (Mapstone, 2024).

At Huron, we apply a different frame to resilience. Rather than asking only where can we cut, leaders must also ask what capabilities will we need in three to five years’ time; which activities genuinely support student success and regulatory confidence; where resources are spread too thinly to be effective; and what institutions should consciously stop doing because it no longer aligns with strategy.

This requires moving beyond a single‑year deficit mindset. Multi‑year financial forecasting helps distinguish between short‑term gaps and deeper structural misalignment. Sector analysis shows that surpluses have more than halved in recent years and that recovery assumptions rely heavily on international recruitment patterns that remain volatile. In this context, transparency about the scale of the challenge, the trade‑offs involved and the limits of what is possible becomes essential to maintaining trust with staff, governors and students.

Cost control remains necessary, but resilience cannot be achieved through cost reduction alone. Leaders must widen the solution set to include revenue diversification, targeted investment and deliberate reallocation of resource. Small gains, when combined, can materially reduce pressure elsewhere and help avoid decisions that permanently weaken institutional capability.

Professor Chris Day, Vice‑Chancellor of Newcastle University, framed this challenge clearly. Writing to staff in January 2025, Professor Chris Day, Vice-Chancellor of Newcastle University, argued that while reserves can absorb short-term shocks, institutions must act decisively to restore balance between costs and income for the long term (Day, 2025). That balance cannot be achieved through deferral and drift. It requires leadership willing to confront uncomfortable truths about scale, scope, and prioritisation.

Perhaps the most difficult element of resilient transformation is confronting trade‑offs honestly. Every decision carries consequences. Resilience is undermined not by imperfect decisions, but by delayed or avoided ones. For mission‑driven organisations, this is uncomfortable work — but inaction is far more damaging than committing to an informed, strategic, yet imperfect path.

For AHUA members, this moment represents a profound shift. Registrars, secretaries, COOs, and senior professional services leaders are no longer simply implementing change; you are architects of institutional resilience. True transformation is not louder, faster or more frequent change. It is change with direction, intent, and courage — and it is the difference between surviving the next challenge and being ready for the ones that follow.

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John Workman and Susie Hills are co-presenting at the AHUA Spring Conference 2026.

John Workman is a Managing Director at Huron and leads the Global consulting team, working with university senior leaders across the UK and Europe.

Susie Hills is a Senior Director at Huron and formerly the co-Founder and CEO of Halpin (acquired by Huron in 2025). A specialist in Higher Education consultant, Susie has led reviews of Governance and professional services with institutions in the UK and Ireland.

References

Office for Students (2025). OfS analysis finds continued pressure on university finances. https://www.officeforstudents.org.uk/news-blog-and-events/press-and-media/ofs-analysis-finds-continued-pressure-on-university-finances/

UK House of Commons Library (2025). Higher education finances and funding in England. https://commonslibrary.parliament.uk/research-briefings/cbp-10037/

Institute for Fiscal Studies (2024). Higher education finances: how have they fared, and what options will an incoming government have? https://ifs.org.uk/publications/higher-education-finances-how-have-they-fared-and-what-options-will-incoming

Times Higher Education (2025). University finances worse than predicted as nearly half in red. https://www.timeshighereducation.com/news/university-finances-worse-predicted-nearly-half-red

Times Higher Education (2026). Third of UK universities post deficits but cash flow improves. https://www.timeshighereducation.com/news/third-uk-universities-post-deficits-cash-flow-improves

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