Universities across Wales are facing one of their toughest financial years yet, amid warnings of a “failing funding system”.
Universities Wales, the body representing the nation’s institutions, says the sector recorded a combined deficit of around £77 million last year. This shortfall is expected to remain the same, or even rise, when new figures are released next month.
According to Wales Online, despite job cuts, spending freezes, and emergency government support, university leaders say their financial situation remains precarious.
Professor Elwen Evans KC, Chair Professor of Universities Wales, said: “The current model just isn’t sustainable. We need a system that reflects the changing pressures facing universities and the economy.”
Rising costs, inflation, and a fall in income from international students have all increased the strain on Welsh universities. Home tuition fees, currently capped at £9,535, no longer cover the actual cost of teaching.
Cardiff University, which announced massive job cuts earlier this year, still has 200 staff members uncertain about their positions. Other universities, including Bangor, Aberystwyth and Swansea, have also launched redundancy or savings programmes in recent months.
Data from Universities Wales reveals the sector contributes roughly £11 billion a year to the national economy and generates £13 for every £1 of public funding. Yet, institutions warn that such an impact may not be sustainable under current funding conditions.
On 15th October 2025, Universities Wales released its manifesto ahead of next year’s Welsh Government elections, urging all political parties to support an independent review of university funding. The review would examine how government, students, and business share the financial burden, and explore how universities can better respond to Wales’ changing skills needs.
One proposal is to expand degree apprenticeships, which allow students to combine academic study with industry experience. Programmes currently operate in sectors such as digital technology and construction, but could expand into fields like health, education, and business. These will help to fill skill gaps while attracting new sources of funding.
Professor Evans argued that giving institutions more flexibility in expanding apprenticeships would let universities work more closely with employers, enabling them to respond more quickly to economic requirements.
Not all institutions are responding in the same way though. Cardiff University’s vice-chancellor, Professor Wendy Larner, has spoken about becoming a smaller, more selective institution focused on “higher-tariff” applicants.
In contrast, Professor Joe Yates, vice-chancellor of Wrexham University, has emphasised widening participation and tailoring degrees to local employment demands. His institution is one of only two in Wales that did not post a deficit last year.
Wrexham University via Google Maps
Professor Yates said: “Universities with a civic mission have a vital role in strengthening regions through skills, innovation, and research.”
Reports from WalesOnline and the University and College Union (UCU) show the financial strain is also creating staff unrest. The UCU launched a UK-wide ballot on industrial action on October 20th 2025, covering all eight Welsh universities. If approved, strikes could begin early next year.
At Cardiff, staff unions say workload pressures have worsened following voluntary redundancies, with remaining lecturers expected to maintain the same student numbers despite smaller teams. Similar concerns have been raised at Swansea and Bangor.
Experts warn that continued financial instability could threaten the survival of some institutions.
Nick Hillman, director of the Higher Education Policy Institute, declared that Welsh universities face “added uncertainty” ahead of next year’s Senedd elections. He noted that only 32 per cent of Welsh 18-year-olds applied to university last year, the lowest rate in the UK. Hillman warned that further cuts or fee rises could make higher education even less accessible.
Mr Hillman said: “There’s concern about participation, funding, and whether some universities can stay afloat.”
Swansea Great Hall via Google Maps
Despite the bleak outlook, university leaders argue that higher education remains one of Wales’ most valuable assets. Prof Evans emphasised that “education saves lives”, adding that universities play a vital role in developing skills, research and innovation across Wales.
A spokesperson for Swansea University told The Cardiff Tab: “The UK higher education sector is facing a number of challenges, exacerbated by significant changes to the international student recruitment context. In common with many other universities, Swansea University needs to make savings to ensure our future financial sustainability and, over the past three years, we have worked hard to secure these essential savings by reducing our overall expenditure, through the careful management of vacancies at all levels and through voluntary staff exits.
“Given the scale of the challenge across the sector, we acknowledge that difficult decisions have been, and will continue to be, taken. We are deeply aware of the impact that this may have on our staff community and our priority throughout this process has been to support our colleagues. We also continue to engage meaningfully with our recognised Campus Unions as we explore all available options to meet the financial requirements of the coming year.
“Swansea University remains committed to providing an excellent student experience and high-quality teaching, and to conducting world-leading research.”
Cardiff University declined a request for comment.
Bangor University, Aberystwyth University and Wrexham University have not yet responded to a request for comment.
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Featured image via Google Maps and Canva
