UK HE Financial Sustainability Model 2026-2035
Sector Financial Sustainability Model
Consolidated Projections 2026 – 2035
Scenario: Central Forecasts (Midline)
Base: 2026 = 100 (Balanced Budget Assumption)
1. Projected Income Composition
Stacked breakdown of Nominal Income. Assumes domestic fees track RPI (2.8%) and TNE grows at 4%. Note the shrinking proportion of Domestic Fees (Blue) post-2030.
2. Projected Cost Composition
Stacked breakdown of Nominal Costs. Staffing (Red) remains the dominant cost, compounding at ~3% annually. Estates (Orange) widens after 2028 due to Net Zero capital requirements.
3. Sector Financial Health (Central Forecast)
The delta between Total Income (Solid Line) and Total Expenditure (Dashed Line). Green zones indicate surplus; Red zones indicate deficit. The model shows a "squeeze" around 2030-2032 as the demographic cliff hits while inflation costs persist.
4. Risk Sensitivity Analysis: The "Double Squeeze"
New Scenarios
Projected Net Operating Position (Surplus/Deficit) under three conditions.
Scenario A: Costs drift 0.5% higher annually (Techflation/Finance).
Scenario B (Perfect Storm): Costs higher AND Income drifts 0.5% lower annually (Soft International/TNE).