At Bett UK 2026, the Higher Education Theatre hosted a timely and thought-provoking conversation tackling one of the sector’s most pressing issues: the financial sustainability of UK universities.

As well as a jam packed theatre, the session brought together Amol Rajan and Vivienne Stern MBE, Chief Executive of Universities UK, for an honest exploration of the forces reshaping the university landscape.

Navigating headwinds, not a crisis

While headlines often suggest an impending financial crisis, Vivienne Stern challenged that narrative. Representing 142 universities, she emphasised that the sector is not in collapse, but under sustained and intensifying pressure.

Rising energy costs, persistent inflation, national insurance increases and frozen tuition fees have created a perfect storm. Universities, she explained, are being forced to “paddle very, very hard beneath the surface” just to maintain stability.

The reality of the funding gap

At the heart of the discussion was a structural imbalance in the UK’s domestic funding model.

Vivienne illustrated this starkly: training a veterinary student costs around £20,000 per year, yet universities receive just £9,500 in tuition fees and roughly £1,000 in government support.

To close this gap, institutions have become heavily reliant on higher fees from international students.

However, this model is increasingly fragile. Recent policy changes, including tighter visa regulations and restrictions on dependents, have introduced significant volatility. While educating global talent remains a privilege, over-reliance on international income exposes a deeper systemic vulnerability.

Shifting priorities and the future of participation

The conversation also highlighted a quiet but important shift in government ambition.

The original target of 50% Higher Education participation has evolved into a broader goal: 66% of the population achieving Level 4 qualifications or above, spanning degrees, apprenticeships and alternative pathways.

This expansion reflects the growing demand for high-level skills across the UK economy. But it also raises important questions around how that ambition is funded.

The recent decision to unfreeze tuition fees and link them to inflation marks a turning point. While controversial, Vivienne noted that the previous cap had steadily eroded real-term funding over the past decade.

Transformation through collaboration and technology

So, how can universities adapt?

Vivienne pointed to Universities UK’s new Transformation and Efficiency Taskforce, an initiative focused on driving radical collaboration across the sector. From shared procurement models to institutional mergers, such as the formation of City St George’s, University of London, universities are beginning to rethink traditional structures.

Alongside this, audience discussion turned to the growing role of EdTech. Expanding online and hybrid learning models presents a clear opportunity to reduce costs, widen access, and reach global audiences without the limitations of physical campuses or visa restrictions.

This is where innovation becomes critical, not just as an enhancement, but as a strategic necessity.

A defining moment for the sector

As the session closed, one message stood out: the current funding model is under real strain.

Whether funded by taxpayers, graduates, or international cross-subsidy, delivering world-class education and sustaining the UK’s position as a research leader requires long-term, sustainable thinking.

For universities, the path forward will depend on agility, collaboration, and the intelligent adoption of technology.

And for the wider education community, it’s a conversation that is only just beginning, one that Bett will continue to lead on a global stage.