UK: Universities may face deficit

Serious concerns have been raised about the future financial sustainability of the UK's universities, writes Hannah Richardson of the BBC. The higher education sector overall is predicting a 4% real terms deficit, partly due to a £2 billion (US$3 billion) shortfall in research funding and high staff costs.

Some universities have surpluses, but many are not setting aside enough for future challenges, a report by university employers and unions said. UK universities' global standing could be damaged as a result, it added.

According to the Joint Negotiating Committee for Higher Education Staffs Review of Higher Education Finance and Pay Data, universities in the UK are predicting an average surplus of 1.6% for the end of the financial year. But once these are adjusted to reflect the 'real economic cost' of their assets, a deficit of about 4% is more likely for 2008-09.
Full report on the BBC site