In early September we wrote to members to ask for their plans and concerns relating to the cost of living increase and the specific issues around energy costs. 

Many large HEIs are members of the TEC energy consortium which has offered universities some stability at fixed prices. However not all universities are members of the scheme, and the majority of GuildHE members are not. This means that energy costs are a considerable risk to many in the sector (between 80% – 300% increase) and coupled with staff pay and pensions and the increased need to offer students financial assistance, the sector is moving into a perfect storm of vast additional financial costs yet tuition fees are remaining frozen. 

Our members provided examples of cost-saving measures to cut down on energy costs but are all taking decisions to offer warm spaces on campus to better support their staff, students and local communities. Therefore, closing buildings would be the last resort option. Furthermore many of our members have specialist spaces that are vital to teaching (and their industry) that use significant amounts of power to run, such as kilns. These are a vital public service as well as an essential part of the student experience. 

Institutions across the country are having to make financial savings in all areas to cover energy costs, rising staff costs and student support provision, and we are concerned that unless there is a new funding settlement for HEIs this will start to directly impact the student experience. The Government’s announcement on business energy relief does not fix the longer term funding gap. Not all HEIs can – or want to – grow to increase income, and we know that in reality there is no surplus from tuition fees to meet these increased costs and invest in the future. Many providers are working hard to generate external income, but this is often much harder in a small HEI.

Members also have longer term plans to create additional power generation on site and to be Carbon Zero, but without accessible grant funding this is difficult to achieve with other pressures on limited cash reserves.

Supporting Students

Separate research by Universities UK, NUS and Save the Student have found there is a growing shortfall between the amount of maintenance loan given to students and the real cost of living. Many are reliant on food banks, which is having a profound impact on student mental health and wellbeing. This will only become more challenging throughout this year and beyond if energy and inflation stay high. Our members deeply care about students and are setting up food banks, community larders, free soup kitchens and commuter kitchens. They are also offering free bike repairs, free sanitary products and deals with the local council on travel costs. They are increasing their hardship funds in anticipation of an increase in demand, but these all come at a considerable extra cost to providers. 

Many members are also trying to offer more paid jobs on campus for students. There is a concern that the hospitality industry, which students are heavily reliant on for term-time jobs, may contract due to the ongoing cost of living pressures felt around the UK. Many students are also on zero hours contracts which do not guarantee work. Therefore, there may be fewer opportunities to make money whilst studying. For those that do secure regular employment, there is also a worry that this will mean they have less time to engage fully in the HE experience. My PhD research showed there is a significant impact on the onward value of their degree to students who must work. HE providers should therefore think about free and timetabled activities to grow students’ social and cultural capital to make the most of their time on campus. 

We recommend to Government that there are a number of ways in which additional money could support providers and students through this time. They include:

• Releasing a national hardship fund for students which could be distributed in a similar way to the Covid support fund.
• Ensure that future increases to the Maintenance Loan reflect the actual cost of living.
• Reinstate a Maintenance Grant for the poorest students – perhaps repurposing the new national scholarship scheme already announced. 
• Provide financial support for university buildings, especially those that are designated for community use and for specialist facilities.
• Support for energy costs relating to halls of residence, taking account of the financial hole left by Covid accommodation repayments.

We have synthesised the comments from members into a 10-page briefing that we wanted to share with members in case it is of help to reflect on what some other institutions are doing. Members can contact info@guildhe.ac.uk if they haven’t already received the briefing.