Cardiff University is taking action to minimise potential increasing deficit of £65M

Cardiff University is taking action to minimise potentially increasing its deficit to £65m.

The Russell Group uni has said that if cost-saving measures are not implemented during the current financial year, its deficit will climb.

The UK Government’s decision to raise the employer national insurance will create a £7 million plus annual financial hit for the institution, surpassing any additional increases in domestic student tuition fees.

This adds to the financial challenges many universities are already facing, such as inflationary pressures and a loss of high-paying tuition fees due to a significant decline in the number of postgraduate international students after the government’s changes in obtaining family member visas.

According to BusinessLive, the university’s chief financial officer, Darren Xiberras, has said that the 1.2 per cent increase in employer national insurance contributions introduced by the UK Government will have a £2 million impact on the university’s current financial year as of April. However, it will rise to more than £7 million in its first full financial year of paying the increased tax.

In line with England , the Welsh Government granted Welsh universities to increase the yearly tuition fees for domestic students by £250, reaching £9,250. This has now been set to reach £9,535, from September 2025.

The BBC has reported, regardless of these increased fees, by 2025-26, 72 per cent of UK universities may wind up spending more money than they get, forcing them to utilise an overdraft or financial reserves, with a total deficit of £1.6 billion forecast throughout the education sector.

Furthermore, the Welsh Government has yet to decide whether it would follow the UK Government’s lead that allows universities in England to make further ‘modest’ increases in line with inflation.

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“Even if adopted here (rise in Wales) it would not offset the increased costs caused by national insurance payment increases,” Mr Xiberras said.

Jo Grady the UCU general secretary, responded to the decision to raise tuition fees: “The proposed hike to tuition fees is both economically and morally wrong.

“Taking more money from debt ridden students and handing it to overpaid underperforming vice-chancellors is ill conceived and won’t come close to addressing the sector’s core issues”.

Despite the university possessing around £427 million in liquid assets, much of it is unable to be spent.

BusinessLive has also said by 2055, the university must repay £400 million from a bond issuance that helped fund new construction projects, including its Spark campus.

They added that £62 million is being set aside from bond revenue to invest in a repayment strategy that includes long-term assets that it thinks will increase in value to assist fulfil the debt. Although the university has £53 million in endowment funds, these cannot be used to close operational deficits and must be utilised in accordance with donors’ intentions

The university stated that it will use the remaining interest payable bond money, around £144 million, to invest in comparable initiatives to produce “sustainable long-term income streams, enhancing the fabric of the university.”

A spokesman for the university said: “The £65m is how much our expenditure would exceed our income. To get to the £28m deficit (agreed by council) we need to find £37m of savings and/or income. We will do this through making non-pay savings, in areas like estates, IT costs, travel and other procurement savings.

“We have increased the numbers of domestic students recruited to partially mitigate the impact of lower international students.

“We have opened a voluntary severance scheme to reduce our staffing costs. We continue to operate recruitment controls and are only recruiting what are deemed critical posts. The university is reducing its reserves to finance these deficits. However, it is not a position we can sustain indefinitely which is why we need to reduce our cost base in the short-term and aim to grow our income sustainably over the medium-term.”