UK universities are trapped in a box. Here’s what that means in practice

• This guest blog has been kindly written by Professor Diana Beech, Director of the new public policy institute – the Finsbury Institute – and Assistant Vice-President of Policy and Government Affairs at City St George’s, University of London. Diana is one of the two authors of the latest HEPI debate paper (Debate Paper 40) and she writes here about the piece came about…

Explaining the challenges facing UK universities today is not easy. The pace of change is rapid, the policy pressures are competing and the landscape is shaped by complex interplays between funding, regulation, mounting costs and increasing expectations.

This makes the job of university governors particularly taxing. Many governors come from other sectors and industries, bringing valuable external experience, but often without a deep knowledge of higher education per se. As an independent governor myself – at the University of Worcester where I am also Vice-Chair of the Board – but with a background and experience in higher education policy, I’ve long felt a responsibility to help my fellow governors across the sector make sense of it all. That’s why I created a visual tool I call the ‘HE Box’.

The original ‘HE Box’

At first, the ‘HE Box’ was simple. It was a two-dimensional model created to depict a sector squeezed on all sides. It illustrated the four immediate pressures that were boxing universities in. These comprise:

• The resource wall: Domestic per-student funding has been declining in real terms across the UK, meaning the money received no longer covers the basic costs of delivery.
• The cost wall: Institutions are facing rising and often hidden operational costs – some a result of government policy changes, others responding to changing student expectations – but the net result is pressure on already constrained resource.
• The regulatory floor: Instead of supportive foundations, universities face growing, disproportionate, disjointed – and sometimes even politicised – regulatory demands.
• The international lid: Changes to visa and immigration terms and post-study work entitlements are threatening the continued flow of overseas students into UK universities.

Although basic, this 2D box helped me to explain to university governors on my ‘board roadshow’ the main tension that has been growing in the sector of late – namely universities being forced to do more with less, with little relief or flexibility from any direction.

The moving box

Over the past year, the ‘HE Box’ has shifted in response to various policy changes. In England, for example, the one-off domestic fee increase granted by the Education Secretary should be offering some financial breathing room for providers from September 2025. Yet, any relief from the announcement was short-lived, with the hike in employers’ National Insurance contributions in April 2025 more than offsetting the gains in the scheduled domestic undergraduate fee rises.

Similarly, the regulatory floor in England should have also seen some easing last year with the promise to ‘reset’ the Office for Students’ approach to regulation following the House of Lords’ report and Independent Public Bodies Review. Yet this, too, has been recently undercut by the UK Government’s Immigration White Paper, which pledged to reduce the post-study work rights of international graduates from UK universities from two years to 18 months. Gains on one side of the box have therefore been quickly reversed by pressures from another.

Expanding the box

Short-term pressures are, however, not the whole picture of the challenges facing UK universities. After presenting my original 2D model to the Council of City St George’s, University of London, shortly before joining in April 2025, Professor André Spicer helped evolve it into a more comprehensive 3D box – adding two more sides of long-term challenges to the ‘HE Box’ based on his own thinking on the sector’s predicament. These two new sides focus on:

• Demographic shifts: The UK’s domestic 18-year-old population is projected to shrink over the next decade. Meanwhile, key overseas markets like China and India are experiencing major population changes of their own, as a result of declining birth rates or societal shifts related to the education of women.
• Alternative pathways: From apprenticeships to online micro-credentials, viable alternatives to traditional university degrees are growing fast. In an age of scepticism about value for money and returns on investment, universities must work harder than ever to prove their worth for individuals and for wider society.

Why the ‘HE Box’ matters

The six sides of the ‘HE Box’ capture the full range of pressures currently squeezing the sector, both immediate and existential. Our latest report outlines these pressures in more detail and suggests how university governors, senior leadership teams and policymakers, together, can help universities break free from this dire ‘boxed-in’ situation.

Of course, the sides of the ‘HE Box’ will shift again as policies evolve. But the 3D model as it stands today offers a practical framework to:

• help new governors quickly grasp the policy landscape;
• support better decision-making under pressure; and
• push for a stronger, more strategic relationship between universities and governments right across the UK.

The challenges for the UK’s higher education sector are real, but their outcomes are not inevitable. With clearer thinking and a shared understanding of the constraints, it is my sincere hope that we can start to find our way out of the ‘HE Box’ together.