Small and specialist institutions in England may be faring better financially than traditional universities as they have not experienced the boom and bust of recent years, according to experts, but risks remain as larger providers look to scoop up leaner ones.
A recent report from the Office for Students analysing the higher education sector’s financial sustainability found that, as a whole, surpluses had increased by 14.7 per cent compared with last year, but that the improvement was driven “primarily by providers in the medium, smaller, specialist creative and specialist typology groups”.
“The aggregate gains for these cohorts more than offset a deterioration in performance among larger research-intensive, larger teaching-intensive and Level 4 and 5 providers,” the report said.
This appeared to buck predictions that it would be the smaller institutions that would fare worse in the financial crisis, with many forecasting they might be swallowed up by larger universities.
As a group, smaller providers recorded a surplus of £139 million in 2024-45, up from £62 million the previous year. This figure is forecast to increase to £390 million by 2028-29, although the OfS has warned against “persistent over-optimism” in sector projections.
