Russell Group University AssetsBurgeon Under Conservative Rule
As students and lecturers face tougher circumstances, the wealth of their institutions has risen markedly in recent years, reports Sascha Lavin
Subscribe to our newsletter for exclusive editorial emails from the Byline Times Team.
Russell Group universities have increased their assets by almost 50% – some £16 billion – under Conservative rule, analysis by the Byline Intelligence Team can reveal.
The elite group of 24 universities saw their asset wealth increase from £26 million to £48.7 million between 2011 and 2020 – an 87% boost. This amounts to a real-term rise of 49% in net assets during this decade.
The windfall in wealth hasn’t trickled down to university students and staff. Instead, the Government recently announced a student loan hike – set to hit lower-earning graduates the hardest – while university staff have experienced a pay cut of 25.5% in real terms during the past 12 years of successive Conservative rule.
The National Union for Students told Byline Times that the increase was “immoral”.
Its vice-president for higher education, Hillary Gyebi-Ababio, said: “Students, not pound signs, should be universities’ priority. In the past few years, I have heard from students locked inside their accommodation and relying on both food banks and loans from (financial services company) Klarna. It’s simply immoral that universities were benefitting so much at the same time.”
While nearly one in 10 students were forced to rely on food banks during the Coronavirus pandemic, universities hoarded wealth. Russell Group universities accumulated £2.2 billion in surplus cash during the crisis, according to a recent Telegraph investigation.
Teaching time was also reduced and classes moved online during the crisis – a trend that continues to this day as academic staff strike over pay, pensions and working conditions – yet students are still expected to pay more than £9,000 a year for their degrees.
With the class of 2020 taking out £45,060 in loans on average, recent research by the Higher Education Policy Institute found that graduates felt that tuition fees represented poor value for money.
Already being crippled by the costs of university, the same study reported that graduates found their debt “draining, weighing them down, on their shoulders”. Yet, the Government recently announced plans to saddle students with even more of the same.
Under the proposed student loan changes, graduates will be forced to pay back more of their loan, sooner, and for longer, at a time when the cost of living is rocketing. The repayment term after graduation is set to increase from 30 years to 40 and the repayment threshold would be frozen. Interest rates on these loans are also set to increase from 1.5% to 9% among low earners and up to 12% for higher earners.
The Institute for Fiscal Studies predicts that these changes will hit the lowest-earning graduates hardest, who stand to be £28,000 worse off than under the current system.
University staff have also lost out during the past decade. Academics who have already had their pay cut by 20% in real terms over the past 12 years, despite a greater workload, now face a 35% reduction in pension payouts under the Universities Superannuation Scheme.
Byline Times previously reported that some university teachers are unable to buy a house or start a family because of the lack of job security, with zero-hour and short-term contracts becoming increasingly common.
The Education Industry
Yet, as students and staff struggle to make ends meet, universities have amassed billions in assets under successive Conservative governments.
The University of Manchester had the biggest jump in asset wealth over the decade: its real-term net assets soaring by 100% to £1.8 billion.
One final year medical student at the university took to Twitter to explain their struggles to make ends meet as their student loan and NHS bursary falls £3,313 short of the £10,330 estimated annual living costs for a University of Manchester undergraduate.
Luisa Ortuzar, a first year international student at University College London (UCL), also worries about money. “It’s so expensive in London, I’m struggling quite a bit,” she said. “And I’m paying so much money for receiving no class because teachers are also super angry because they are cutting their salaries.”
UCL’s asset wealth rose from £750.4 million to £1.6 billion between 2011 and 2020 – a 73% increase in real terms.
“We are deeply sorry to hear that one of our students is struggling financially and we encourage them to seek support with our student funding advisers. We have schemes to help students who are facing financial difficulties and can provide advice and information,” a UCL spokesperson said. “While most of our asset value sits with our estate, a considerable proportion of our endowment portfolio is held exclusively for the funding of scholarships, bursaries, studentships and hardship funds. In the most recent financial year, we spent £89 million on student scholarships and prizes, which is three times the amount we spent in 2011.”
The prestigious universities of Oxford and Cambridge proved to have the most assets, with a combined post-debt wealth of £27.5 billion – £6.4 billion more than the total net assets of the remaining 22 Russell Group universities.
Oxford saw its assets rise from £5.8 billion to £12.9 billion – a 77% real-terms increase over the 10-year period.
Cambridge has also accumulated vast sums of wealth since 2012, with its net assets almost doubling to £14.6 billion over the decade – or equivalent to 55% after inflation. Wolfson College saw the biggest increase in total assets among the university’s colleges – a 128% real-terms rise in asset wealth from £27 million to £78 million.
Proving Winston Churchill’s theory that land “is the original source of all wealth”, Oxbridge’s nearly 70 colleges collectively own 51,000 hectares of land – an area more than four times the size of Manchester – worth £3.5 billion, according to a 2018 Guardian investigation.
Yet, the vast wealth of these two institutions rarely has an impact on those who need it most. Research by the Sutton Trust and the Institute for Fiscal Studies, published last year, found that Oxford and Cambridge failed to boost social mobility because so few people from disadvantaged backgrounds are admitted each year.
According to the study, in the mid-2000s, children on free school meals were nearly 100 times less likely to attend Oxford or Cambridge than their privately educated peers.
Although the University of Oxford prides itself on spending £15 million each year on outreach activities and financial support in a bid to recruit undergraduate students from diverse backgrounds, this investment is a fraction of the university’s eye-popping wealth – just 0.12% of its nearly £13 billion-worth of assets.
A University of Cambridge spokesperson said: “We have made significant progress in admitting students from more under-represented and economically disadvantaged backgrounds. Over the last five years there’s been a 2% increase in the number admitted from POLAR Quintile 1 areas of the country.”
The Participation of Local Areas (POLAR) is a measurement used by the Office for Students – the higher education regulator – to look at what percentage of children in each area enter higher education.
But, according to figures published by the Higher Education Statistics Agency, Oxford and Cambridge, along with 15 other Russell Group universities, failed to recruit enough students from POLAR 1 areas – parts of the UK where students were least likely to go to university.
The Russell Group, Manchester University and the University of Oxford did not respond to requests for comment.
This article was updated on 3 May at 12pm to remove a reference to a publicly-available tweet that referenced the personal details of a student.
This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.