Warwick bucks national trend after another profitable year

Amid an increasingly dire national picture for university finances, the University of Warwick recorded yet another year in surplus last year, placing the institution in a stronger position than many of its peers.  

However, Warwick is not entirely in the clear, as the size of its financial balance fell by nearly a quarter from the previous year, with the University posting a surplus of £35.9 million in the 2024/25 financial year – down 23% on 2023/24’s surplus of £46.8 million.  

Those figures also mean that the University fell short of its target surplus of 5–7% of total annual income last year, a reflection of the mounting financial pressures challenging even the most financially stable of universities.  

Warwick’s total income rose by 1.2% to a record £870.7 million last year, driven largely by an increase in revenue from home student tuition fees, grants, and educational contracts

In recognising those challenges, the University still celebrated their position, saying that the figures represented “another robust financial performance”, given the “current economic conditions and fiscal environment”.  

Warwick’s total income rose by 1.2% to a record £870.7 million last year, driven largely by an increase in revenue from home student tuition fees, grants, and educational contracts.  

Spending, however, also increased, with staff costs rising by £17 million this year to £488.6 million, equivalent to 56% of the University’s total income.  

A voluntary severance scheme, which the University stressed was solely a “cost-saving measure”, was announced in November, suggesting that cuts will be made to that number over the coming year.    

Echoing concerns raised by Vice-Chancellor Stuart Croft late last year, the University also warned that government policies, such as the proposed £925 levy on international student fees, and the decline in undergraduate home fees in real terms could further impact the institution’s future financial outcomes. 

Almost a third of universities have reported deficits so far this year

While home tuition fees rose to £9,535 this year, and are set to rise even further in coming years in line with inflation, the Russell Group warned in July that undergraduate tuition fees are now worth only an estimated £6,700 in real terms, following a decade of frozen fees and decreases in research funding.  

That, coupled with falling international student recruitment, a problem which has hit Warwick this year with an 8.5% decline in overseas undergraduate intake, has put a burden on all universities across the UK, with reporting by Times Higher Education finding that almost a third of universities have reported deficits so far this year.  

The Office for Students has projected that that number could rise to 45% by the end of the 2025/26 financial year. 

The most alarming financial pressures at the moment are facing Warwick’s neighbouring university, Coventry University, which reported a £60 million deficit in the last academic year – nearly £37 million more than the next group of worst-hit universities. Bosses at the university remain confident in its finances, however, expressing assurance in its “very healthy” cash balances and assets.  

Russell Group universities, which have historically fared strongly in the financial realm, have also not been immune from economic threats over the past year.

Both Cambridge and Queen’s University, Belfast have joined the growing list of universities reporting financial deficits, with Cambridge reporting an £8 million deficit and Queen’s spending £22.8 million more than they earned. 

The University has committed to re-investing its surplus funds from this financial year into new developments, collaboration, and interdisciplinary working

A spokesperson for Cambridge maintained, however, that the university “continues to be in strong financial shape”, saying that the challenges they have faced mirror those “facing the UK higher education sector as a whole”. 

Unlike several of these universities, Warwick has also continued to report a positive cash flow – albeit a slightly lessened figure of £31.5 million – instead of having to rely on reserves or borrowing.  

As such, the University has committed to re-investing its surplus funds from this financial year into new developments, collaboration, and interdisciplinary working. 

One new development which will benefit from the money is the Connect Programme, which will see the development of a new science precinct and social sciences quarter.  

The University previously announced £700 million of investment for the project in October 2024, with work currently underway on the new STEM building – roadworks for which caused havoc on roads into and out of campus in the first week of term, with some students having to abandon their taxis and walk to campus in fear of missing exams.  

A further £52 million was invested in projects, including the Connect Programme, across the 2024/25 financial year, the University’s highest capital expenditure since the pandemic. Spending on these programmes is expected to accelerate further in the coming years. 

[The University] must continue to manage short-term challenges with a focus on financial security for our longer-term strategic objectives

Nilesh Sachdev, University’s Chair of Council

Reflecting on this year’s Financial Statement, Nilesh Sachdev, the University’s Chair of Council, appreciated that “the financial position of the sector remains challenging”, but added that “the University has continued to manage its finances with considerable skill”. 

“As we head into the coming year, we know that financial and political instability will remain,” Sachdev added. “We must continue to manage short-term challenges with a focus on financial security for our longer-term strategic objectives.”

While the University did not comment on its situation compared to that of other institutions across the UK, at least 19 of which reported deficits of over £1 million in the previous financial year, its latest accounts offer a rare picture of stability in a sector increasingly defined by financial uncertainty.