I am delighted to present our second Further & Higher Education briefing.
As the sector continues to operate in a period of significant financial and structural challenge, institutions must navigate a complex environment shaped by tighter public funding, demographic shifts, inflationary pressures, and increasing regulatory scrutiny.
Across Higher Education, the impact of tuition fees having been frozen for a number of years coupled with rising pension and staff costs, is placing considerable pressure on and squeezing operating margins. Equally, Further Education providers face their own set of challenges, including uncertain funding settlements and growing demand for skills, aligned with regional and national priorities. Our briefing touches on various key sector wide issues financial challenges shaping the landscape.
To begin, guest authors Laura Soley, Partner and Alice Faure Walker, Senior Counsel, from Bates Wells consider unlocking restricted and endowment funds explaining the differences between permanent endowment and restricted income funds, the common challenges institutions face when restrictions are outdated or misunderstood, and the legal mechanisms available under charity law to review, update, or release these restrictions.
In my first article, I examine the findings of the Gillies Report, highlighting how weaknesses in leadership culture, financial oversight, and institutional transparency contributed to the University’s challenges. This recent report emphasises the need for robust governance, financial resilience, transparency, and a culture that supports accountability and challenge for sector leaders.
Dougie Todd, VAT Partner, considers the Colchester Institute Corporation v HMRC case, which questions whether Education and Skills Funding Agency grants should be treated as payment for a supply. Dougie urges institutions to stay alert and review their current VAT treatment.
Going concern within financial reporting is a critical topic for audits, especially within the current financial climate. My second article explores how the going concern assumption extends beyond a mere reporting requirement to serve as a fundamental stewardship responsibility.
Universities face rising costs and funding pressures, making understanding the true cost of courses, research, and operations vital. Richard Weaver, Partner, shows how detailed cost analysis enables smarter strategic decisions, ensures financial sustainability, and strengthens governance.
In our next article, Tom Beswick, Manager, considers good governance which has been an especially hot topic in the Further Education space amid recent media attention and sector developments, sharing an insight into the importance of independent structures and transparent processes.
Sharing her perspective on the changing landscape of university applications, Emma Gabe, Senior Manager, reviews the record rise in UK and international university applications in 2025, despite higher tuition fees and living costs.
Finally, we hear from Alice Palmer, Senior Manager, who explores Theatre Tax Relief, and provides key updates, including permanent rate increases and the new Additional Information Form, explaining how organisations can maximise relief.
We hope you enjoy this briefing, mix of topics and find them useful to your institution. If anything sparks your interest, or you’d like to explore any of the issues further, please feel free to reach out to me directly, the article author, or your usual HaysMac contact.
