Universities’ dwindling budgets threaten support for enterprise

UK universities’ funding woes might undermine their ability to help staff and students become entrepreneurs, just as this sort of activity grows more reliant on institutional investment, a new report has found.

Core funds from university budgets now account for 80 per cent of funding for enterprise activity, an increase from 66 per cent in 2020, according to the latest survey of university heads of enterprise conducted by the National Centre for Entrepreneurship in Education (NCEE).

While money from philanthropic funds and government grants has increased by 12 and 3 per cent respectively, respondents said sponsorship and private sector funding was down, as was money from the Higher Education Innovation Fund and the European Union, which supported more than half of universities participating in the survey a decade ago but now only accounts for a third.

Funding has become the single biggest challenge to providing entrepreneurial activity, replacing a shortage of staff, which was the biggest challenge identified in 2020.

Seventy-seven per cent of respondents said the government should do more to support entrepreneurial activity in universities, and the report says sector bodies such as the Office for Students should better “incentivise enterprise activity through policies, metrics and funding programmes, including, for example, grants for students”.

“In previous reports we could see that the ending of European funding was going to have an impact,” said Ceri Nursaw, the NCEE chief executive.

“I think there were hopes and anticipation that the gap would be filled by local funding, but it is clear to see that hasn’t happened and, where there is funding, it is much reduced and more piecemeal.”

Uncertainties around budgets meant that, while more universities than ever before offered initiatives such as start-up funds for students, summer schools and mentoring programmes, activity in other areas had declined dramatically, particularly support for enterprise in local schools – down to 17 per cent in 2023 from 57 per cent in 2012.

Ms Nursaw said opportunities for universities to engage locally had “taken a real nosedive”, with programmes ceasing to exist or being scaled down.

In general, support for enterprise activity in universities remained strong, with 83 per cent saying it had increased in the last three years. Ninety per cent said it was likely to increase in the next 12 months, with half planning a “significant” scaling up.

For the first time the survey discovered that all universities offered credit-bearing entrepreneurship and enterprise courses within at least some degree programmes.

Ms Nursaw said that, although the temptation for universities was to “squeeze” this type of work when things got tough financially, it should be seen as some of the “most essential work they do”.

“We are in a world where nothing stays still, the rate of change is huge and we are constantly being asked to find solutions to new problems – that is what this is all about,” she said.

“Most of us will move in and out of self-employment or more portfolio working, so I don’t think we can turn out any students from our universities without having exposed them to this and thinking about how they can use their degree subjects and the skills they’ve learnt.”

tom.williams@timeshighereducation.com