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Further and Higher Education Market Review Spring 2018

15 March 2018

Gambit announces the publication of its Further and Higher Education Market Review.

Report Summary:

  • Welsh Universities overall have seen a decrease in the number of applicants from the 2016 cycle, as more school leavers enter the likes of  apprenticeship programmes.
  • Universities continue their major contribution to the UK economy, with Welsh universities generating £5 billion of output in Wales in 2017 and creating nearly 50,000 jobs.
  • The short term decline in the population of 18-year-olds, the potential impact of Brexit on student recruitment, and the increasing availability of alternative post-18 educational options, has resulted in an increasingly competitive and challenging Higher Education environment.
  • Welsh colleges have attempted to address reductions in income by reducing expenditure, although deterioration in financial performance has still been experienced as reflected in an overall deficit of £1.7m in the sector.
  • The proportion of the Further Education Institutions’ (FEIs) capital expenditure financed by Welsh Government grants has tended to decline in recent years, leading to an increasing reliance on colleges own reserves and borrowing to fund capital expenditure.
  • Consolidation between education providers has been prominent in the FE sector in Wales, due to the impact of the Welsh Government’s Transformation Programme.
  • Traditional high street banks remain active in providing debt to the sector. However, tenors have become shorter and EIB funding has declined.
  • A wall of liquidity is currently available in credit markets, looking to be deployed by an ever increasing range of institutions – it is important to consider the full range of debt options.
  • Interest rates are expected to continue rising gradually across major economies, but remain very low by historic levels - implementing a strategy in the shorter term is likely to be constructive, particularly for longer term funding.
  • The full implications of Brexit on Institutions and markets is unclear and those with refinance dates either side of Brexit, may want to consider accelerating the process.

To read the full report click here