Every part of the UK’s economy – from classrooms to hospitals, farms to film sets – depends on skilled graduates.

While Labour’s messaging on growth and opportunity has gained traction, its current framing of skills risks reinforcing old divides. The party has rightly emphasised further education, apprenticeships, and technical pathways – but in doing so, it casts higher education as separate from, or even in tension with, the national skills agenda.

GuildHE believes this is a missed opportunity, and one the Autumn Budget can fix. The government can stabilise a sector, safeguard diversity, and sustain regional growth. Prioritising skills policy as a zero-sum choice overlooks the continuum that drives real economic renewal. As many of us know – and cite on a regular basis – collectively, higher education contributes over £70 billion a year to GDP and delivers an estimated £14 return for every £1 of public investment.

Many universities – especially in rural and coastal areas – are anchor institutions for local economies. Cornwall is a great example – a rural area where jobs are often seasonal or insecure, and part-time work accounts for over 40% of employment. There, Falmouth University supports over 2,000 full-time and long-term jobs and contributes £100 million in Gross Value Added per year.

Protecting diversity and specialist excellence

GuildHE members act as both local employers and pipelines for local workforces. The Health Foundation estimates the NHS will need to increase its intake of clinical students by 50% by 2031–32. Specialist providers like Health Sciences University and the Northern College of Acupuncture are already training new clinicians through community-based NHS partnerships. Similarly, GuildHE members educate a significant share of England’s teacher-training cohort. Leeds Trinity University, for example, reports 100% employment rates for some routes and above-national retention, with deep partnerships across the country.

Specialist institutions consistently ‘punch above their weight’. Data from the Knowledge Exchange Framework (KEF) shows they outperform larger universities on metrics such as local growth, SME engagement, and graduate start-ups. When adjusted for size:

  • The Royal Academy of Dramatic Art ranks first nationally for consultancy ROI.
  • Harper Adams University ranks sixth for contract-research impact.
  • The Royal Agricultural University ranks second for IP income – just behind Oxford.

These extraordinary results highlight the danger of fragility. The Office for Students’ 2025 Financial Sustainability Report paints a stark picture: 45% of English providers are projected to post deficits this year, aggregate surpluses have fallen 77% since 2022, and up to 200 providers could be in deficit by 2027–28.

This is why GuildHE has called on the Treasury to address the following issues: 

Tuition fees

Tuition fees have been effectively frozen since 2012. Had they risen in line with inflation, the £9,250 fee cap would now stand at around £15,000. Instead, universities have been squeezed between capped income and spiralling costs. Meanwhile, government proposals such as a 6% levy on international tuition-fee income could further destabilise finances. This is not sustainable. The UK must re-establish a balanced domestic funding model that recognises inflationary pressures and supports a diverse ecosystem of institutions.

Regulatory and pension obligations 

The current funding and regulatory environment penalises precisely those providers delivering the highest community value. Smaller institutions pay far higher per-student regulatory fees to the Office for Students. An institution with 75 students may pay £382 per student, compared to £11 at a large university with 20,000 students.

On top of this, employer pension contributions have risen sharply – from 16.4% in 2019 to 29% for those in the Teachers’ Pension Scheme – yet higher education institutions, unlike FE colleges, receive no mitigation funding.

Public investment in higher education teaching and infrastructure

Creative institutions such as Arts University Bournemouth, Falmouth University, and Hereford College of Arts fuel a sector worth £125 billion annually, employing 2.4 million people. Yet teaching creative disciplines costs around £23,000 per student per year, while income covers less than half. Without an intervention to support regionally or nationally significant specialists, the UK risks eroding one of its greatest competitive advantages.

Introduce a High-Impact Grant for specialist institutions of regional or national significance

GuildHE institutions are deeply embedded in their regions, acting as civic and cultural anchors. In many towns, they are the single largest employer and catalyst for local innovation. To truly ‘level up’, government spending must reflect this civic role. Funding mechanisms such as the Higher Education Innovation Fund (HEIF) and regional growth grants should recognise social and regional impact, not just institutional income.

This Autumn Budget must be seen not as a rescue package, but as an investment in national prosperity. Specialist and regional universities already deliver the vocational and industry-linked training Labour wants to expand. Yet years of under-investment, rising costs, and reliance on international student income are threatening the diversity that makes our system world class.

The UK’s higher-education system is one of our greatest national assets – but it is running on fumes. By investing now in diversity, regional capacity, and high-value skills, the Treasury can secure a resilient, globally competitive sector that supports growth across the whole country.

Read GuildHE's representation to HM Treasury: Autumn Budget 2025