I beg to move, That this House has considered the financial sustainability of higher education. It is a pleasure to serve under your chairship, Ms Vaz. Our universities are integral to a thriving United Kingdom.

They drive economic growth, ensure that the workforce has the skills necessary for the jobs of tomorrow and boost the UK’s global standing.

They are engines of social and economic progress, but behind those important functions lies an equally important reality: the financial sustainability of this vital sector and our economy.

For almost a decade, universities have faced declining investment, despite recognition of our world-leading higher education and research system.

As the chair of the all-party parliamentary university group, vice-chancellors from a range of institutions have told me that the pressure to deliver world-class teaching and research with less is becoming more acute.

The Government’s announcement on 4 November 2024 of an inflationary increase in tuition fees in England cannot have been an easy decision, but it was necessary. Prior to that announcement, tuition fees had risen only once, by £250, since the introduction of £9,000 fees in 2012.

Inflation has cut their value to just £5,924 in 2012-13 prices, while Government grants for teaching have declined by 78% over a decade in England. The financial picture across the UK is equally challenging.

Welsh universities had their fees capped at a lower level than English institutions until 2024, and over the past decade, funding per student in Scotland has declined by over £2,500. In Northern Ireland, funding per student has lagged behind England by over £1,000 a year.

The Office for Students estimates that by 2025-26, there will be a net reduction in income for the sector of £3.4 billion and, without significant mitigating actions, a sector-level deficit of £1.6 billion, with up to 72% of providers being in deficit and 40% having low liquidity.

This is a really important debate, but it does pose a question, and I want to ask the hon. Gentleman for his thoughts on it. He referred to the cost of living pressures that every family has, wherever they may be in this United Kingdom.

I suspect that those, combined with the increase in higher education fees, will mean that we are in danger of going back to a state where only well-off families can afford to have their children in university, while the rest will have to go to work to provide the moneys just to live.

Does he share my concern about that?

Will the hon. Member give way?

I will give way. The hon. Lady mentioned that she thought it was good that the Government are increasing fees to allow more resources for universities. Will she confirm that she shares my understanding that overall resources are going down in real terms because of the national insurance increase?

Order. The shadow Minister has gone over his time.

Would the hon. Member mind clarifying his memory of what I actually asked? I asked whether an impact assessment had been done on that decision, rather than giving an opinion on it one way or another.

Sorry. I misunderstood the hon. Lady; I thought she was pressing the Minister to reverse that decision and allow more overseas dependants as a way of encouraging overseas students to prop up higher education. I totally misunderstood—I thought she was pressing for something that she clearly was not.

I will conclude, because I am over time. I hope the Minister will answer some of those questions. I actually sympathise with her: there is a difficult challenge here and it is a knotty policy question.

I will be behind her when she makes sensible decisions, and I wish her all the best in her endeavours to tackle some of those problems, not just for our universities, but for our young people.

I begin by congratulating my hon. Friend the Member for Erewash (Adam Thompson) on securing this important debate. As he eloquently expressed, he has a keen interest in the financial stability of the higher education sector and many other areas, and so do this Government.

I agree with him how great our universities are and I will attempt to respond to many points that he has raised. I join the hon. Member for Cheltenham (Max Wilkinson) in acknowledging our fantastic lecturers, as well as some of the excellent work of our universities up and down the country.

I thank my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins) for her many contributions, including around international students. I will respond to the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien).

However, I find it difficult to hear the many things he said about the pressures on young people when the last Government had 14 years to take our universities out of the dire situation they now find themselves in.

I find it quite astonishing that the previous Government and the shadow Minister have taken no responsibility, offered no apology and shown no acceptance of the disadvantaged situation our universities are in.

Will the Minister give way?

I am going to make some progress and respond to the many points that have been raised—unless he would like to make an apology.

The Minister is complaining about the lack of resources in real terms for universities. Can she confirm that because of the national insurance increase resources in real terms are going to go down, wiping out the impact of the tuition fee increase, with the price of everything going up?

I just wanted to rephrase my question. Do this Government think it is okay not to answer basic questions about how much the national insurance increase is costing education providers—be they nurseries, schools or universities? Can the Minister confirm that she will answer those questions?

It remains a great privilege to serve under your chairship, Ms Vaz. I thank hon. Members, the shadow Minister, the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien), and the Minister for their participation today; they have all made fantastic points in this debate. My hon.

Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins) talked about the importance of supporting diverse communities and people from disadvantaged backgrounds.

She spoke particularly about the University of Bedfordshire, but I know that many of our post-1992 institutions do an excellent job in that regard, so I thank her for raising that issue. The hon.

Member for Cheltenham (Max Wilkinson) talked about maintenance grants and international students, and the importance of supporting both as we move forward; I agree with him on that. I thank the shadow Minister for his contribution.

He made many important points that are salient for us as we move forward. I very much thank my hon. Friend the Minister for her response to the debate.

I associate myself with her comments about the importance of our universities and how fantastic our lecturers are, and I welcome her points about the OfS’s new focus on financial stability, funding for research and ensuring that the best interests of students are protected throughout the sector as we move forward.

I also very much welcome the Secretary of State’s priorities on the Government’s commitments for the sector.

There is a fantastic opportunity for us to work cross-party on this issue, because it is a very difficult and complex problem that affects many of our universities across the country, and it is not going away.

I am very grateful to have started this conversation and to all the Members who have come to Westminster Hall today. Thank you again for your chairship, Ms Vaz. Question put and agreed to. Resolved, That this House has considered the financial sustainability of higher education.