h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I’ve been reading with interest a few reports from Universities around the country about how much money they’ve lost this year, since they’ve increased their tuition fees.

And what seems surprising, is that they’re surprised.

Let’s take as an example Salford University, where I happen to know a couple of the staff and several students. The people running the place however put their fees up, and as a result seem to have 440 fewer students, which seems to account for a £4m loss. £9k a student give or take a few quid. Then there’s Manchester Metropolitan and the University or Manchester who’re both down about 500 students. They’ve not said how much they’ve lost, but if we base it on Salford’s figures (they are all three Universities in the same area after all) means they’ve lost about £4.5m.

My heart’s not bleeding for University of Manchester, they’ve got almost 40,000 students registered so our rough maths works out that they get £360m each year in tuition fees. They’ve lost just over 1% of their intake, not exactly the big worry they seem to be portraying it as. A lot more companies have lost a lot more than 1% of their income this year.

So why do I find it surprising that they’re surprised? It’s quite simple really, any company that increases its costs will lose trade to their cheaper competitors. Fact. That they’ve only lost 1% is actually really impressive. Salford only has just over 13,000 students, which means they’ve lost a whopping (by comparison) 3% of their student body.

The fees themselves have gone up by more than this, I’ve not done the maths here yet, but even with such a small drop in student numbers, the increase in the fees they were changing means that the universities are getting more money than they were before, and have fewer students to spend it on educating.

So, not only am I surprised that they’ve not thought that they’d get less students if they put their prices up, but that they’ve also not realised they’re still getting more money than they were before.

Difficult to comment without comparing balance sheets. There's surely more than one stream of revenue for these institutions, and there may be associated changes to their cost base, as well as transitional changes moving to the new model.

But then I'm no accountant.

Me neither, which is why I wonder how dodgy my maths are. But they're quoting losses that equate to tuition fees per student, with numbers less than they expected.

Which is why I think that it's not a case of them *losing* money, so much as not making as much as they expected.

I'd want to see a comparison between numbers for UK students and those from overseas. The fees are very different, so as long as the unis can attract more overseas students then I don't suppose they will notice a 1% or even a 3% loss of UK ones. And, I believe, overseas students pay up front.