Universities cream off cash as UK business school income rebounds

Budgets are looking up for UK business schools, with many reporting “robust financial health” following previous pandemic-related funding shortfalls, but their research spending continues to lag behind that of other fields, some academics worry.

An annual survey of deans at UK business schools by the Chartered Association of Business Schools found that 81 per cent of them recorded an increase in their income last year, in a turnaround from 2020-21.

Of the schools, 44 per cent experienced a “significant” boost in revenue in 2021-22, while 37 per cent reported modest growth. The remaining 19 per cent said their income was roughly unchanged from last year.

Notably, though, no schools reported decreased revenue this time around – a sharp contrast to last year’s survey, in which 18 per cent of schools reported a drop.

Some 77 per cent of schools expected a further increase in income in 2022-23.

The increase should elicit “great relief” from university administrators, who often rely on their business schools to generate income, said Robert MacIntosh, chair of the business school association and pro vice-chancellor for the Faculty of Business and Law at Northumbria University.

“When business schools do well, universities tend to do well,” he told Times Higher Education.

Last year, 58 per cent of business schools’ net income went back into their parent institution, roughly in line with previous years.

But Professor MacIntosh cautioned that a heavy reliance on his field to subsidise other departments betrayed “stress in the sector”, with some universities leaning on business schools to counteract “very modest surpluses or deficits” amid rising utility bills and looming industrial action on faculty pay.

He also expressed frustration that many institutions still take a short-term look on reinvesting into business schools.

Of disciplines listed in the UK’s Research Excellence Framework, business is among the lowest funded – scoring well below fields such as Classics and theology, Professor MacIntosh noted, warning that continued neglect would ultimately hurt universities.

“The data tells us that business schools have more external research funding from EU funding than from UK sources. Obviously, that’s a worry because it will come to an abrupt halt quite soon,” he said.

This year’s student figures indicate that the effects of Brexit have not entirely worn off for learners either, with nearly half of schools reporting unchanged enrolments from the European Union compared with last year, and many others noting a decline in enrolments from the bloc.

Overall, however, student figures appear to be making positive gains, with 40 per cent of business schools reporting an increase in enrolments of new UK undergraduate students. Meanwhile, 60 per cent reported an increase in enrolments of new non-EU international students at undergraduate and postgraduate level.

While students coming from outside the UK to study business tended to be predominantly from China, the gap between China – the most popular sending country by far – and other nations was narrowing, with a greater proportion of students from India and Africa enrolling, said Professor MacIntosh.

Still, he cautioned that schools’ continued success in attracting international learners was contingent on friendly visa policies.

“If government policy hardens up to a point where it’s more problematic to recruit international students to the UK than to get those same students travelling to other destinations…what we’ll see is a contraction of income,” he said.

pola.lem@timeshighereducation.com