Article
Inflation Link vs.
Originally posted on LinkedIn on October 21, 2025.
Inflation Link vs. Centralised Control: Unpacking the HE White Paper 📄 Yesterday’s government White Paper offered a glimmer of hope to universities’ strained finances with talk of inflation-linked fees. But dig deeper, and the ‘catch’ reveals a powerful new era of centralised control. What the Policy Really Does: 📉 Industrial Strategy by Stealth: New grants and index-linked fees strongly favour “priority” courses (STEM/Skills). This will inevitably push university portfolios away from low-margin Arts and Humanities subjects. 🔀Two-Tier Market: Only institutions that meet the Office for Students (OfS) “quality” standards will be allowed to raise their fees. Others will be locked into flat cash and growth caps, widening the gap. 🚨 Centralised Regulator: The OfS is becoming the new spine of control across Higher Education, with powers for faster investigations, tougher franchising rules, and recruitment limits on courses with weak student outcomes. 🌍💸 International Levy: An Own Goal? Taxing overseas student fee income to fund domestic maintenance grants threatens the cross-subsidy that keeps most UK teaching and research financially afloat. About Those “Tough Standards” The government isn’t enacting formal bans, but funding and regulatory metrics are doing the steering: - Higher fee uplifts are conditional on a higher quality threshold (i.e., strong TEF and baseline compliance). - To quickly access the new flexible loan money for single course modules (LLE funding), a provider must have a Silver or Gold TEF rating. - Recruitment limits and franchising clampdowns will now actively shape where growth can—and cannot—happen. The Net Effect: The government isn’t explicitly saying “close your Philosophy course” but it is pricing and gating the system to ensure fewer such courses run. 🏆 Winners: Universities with good TEF ratings, employment statistics, and diversified income. 🚩Exposed: Universities heavily reliant on international students and portfolios weighted toward non-priority subjects. The Path Ahead: 1. Expect divergence to widen between research-intensive and fragile teaching-led institutions. 2. Compliance and other administrative costs are set to rise across the board. 📈 What are your thoughts on this new regulatory landscape? #HigherEducation #Universities #UKPolicy #WhitePaper #OfS