Expert comment: Managing sector pressures to secure our future

In the first of a new series, we hear from Professor Gary Davies, Deputy Vice-Chancellor, Student Recruitment and Business Development, with a finance update

Date: July 1, 2026

I have worked in higher education for nearly thirty years. The sector has rarely stood still, but the pressures facing universities now are the most severe I have seen. 

University finances are complicated and nuanced. It’s easy to take figures out of context and paint a picture of a thriving or struggling institution, but there are some things that can’t be spun. 

For an institution like ours, almost all income comes from student recruitment. When student numbers move, our finances move quickly. Our published accounts from last December show this in stark terms. Our income fell by £19.5 million in a single year, moving us into a deficit of around £12 million. Our accounts show we are in deficit again this year, and on neutral projections we have very little margin for error going forward. 

We are not alone. The Office for Students confirms a significant proportion of the sector is running a deficit. This is a structural funding problem, not a passing difficulty. Costs have climbed while tuition fees have been frozen for years, falling well below their real value. No amount of good management can fix a funding model set nationally. 

However, thanks to careful stewardship of our finances, we carry no debt and no loans and that gives us some degree of control over our own future. We also have some money in the bank, but that is reducing rapidly while we stay in deficit. The reality is simple: we cannot continually operate in deficit, and we cannot keep using our cash reserves to plug the gap.  

Being free of debt does not change our day-to-day challenges. It is why we have acted early and decisively rather than trying to borrow our way through. Rising costs alone meant we would have needed around 400 more students this year just to stand still. In fact, we recruited fewer. That is the gap we are managing, and it is why doing nothing was never an option. 

Tough choices

Some choices are straightforward, but others have been extremely tough. We have agonised over these decisions, particularly the extensive consultation now being implemented.

We have a deep commitment to providing the best possible teaching and learning facilities, but to protect our core work we have had to pause or significantly scale back many of the major projects in our estate strategy. Only essential works are moving forward. 

We have to balance these necessary cutbacks with targeted investments where they matter most to the student experience. For example, our new Met Cafe and Met Lounge opened in January. This is because our Holloway campus simply lacked the spaces that provide the standard our students expect and deserve to socialise and study and it’s the kind of modern comfortable facility that prospective students look for when visiting on open days.

Shifting sector

Underneath these financial pressures sit real shifts in what students choose to study. National demand for subjects like Languages, Humanities, and Art and Design has fallen sharply, meaning we have needed to make tough choices around our course portfolio. We want to be clear: we will protect courses wherever we responsibly can. But we also have to adapt. At the same time, newer courses in Nursing, Physiotherapy, and the Built Environment are growing well. Reshaping our portfolio to meet these changes takes time. 

We are working hard to open new sources of income to support our core operations. We are growing our transnational education work, with projected income forecast to rise. Domestic undergraduate firm acceptances are also up 22% year on year. We continue to invest in our research and in the areas where our expertise shapes national thinking. 

So, I feel confident we have the foundations in place, but there’s so much of this situation that's out of our control. For home students, this is one of the toughest markets in years. Larger, more selective universities have widened their intake and made lower tariff offers, drawing in students who not long ago would have come to institutions like ours. Such stronger competitive practices squeeze universities like London Met the hardest.  

International recruitment, meanwhile, is genuinely challenging and very far from secure. It depends heavily on immigration and visa policy and on how many students are granted entry, both of which sit with government rather than with us. So while our applications are encouraging, we cannot bank on them, and nor should anyone take our numbers at face value. 

The same caution applies at home. Firm acceptances are up, but acceptances are not enrolments, and we will not have a settled picture until students actually arrive in October. We are working hard towards that, but not counting on it. 

We are also planning within operating conditions that have become genuinely hard to predict. For much of my career, universities could rely on a stable backdrop: you knew roughly what the funding was, where your students came from, and what next year's rules would be. Since 2016, all of that has gone. The vote to leave the EU, constant changes to visa policy, a frozen tuition fee, and a country about to appoint its seventh prime minister in ten years have all moved the ground beneath us, and each was decided well above any single university. We are fighting for every student on ground that keeps shifting. 

I believe the work we’re doing now will succeed, but building new markets and reshaping a portfolio are genuinely long-term projects. The benefits will start to appear in 2026-27 and the years beyond. We will not feel most of that impact in the short term, and it would be a mistake to assume the immediate pressure has eased just because the long-term plan looks promising. The future is being built, but the deficit is here now. We are managing both at once within a volatile political environment. 

The impossibly hard choices we are making now ensure that an institution that matters to London remains strong for the future.