Bankrupt and ravaged by student mental illness, Britain’s universities are badly in need of reform | Simon Jenkins

Forget the NHS for a minute – and look to Britain’s universities, another institution in urgent need of fixing. A number are on the brink of bankruptcy or closure. Revenues are plummeting. Rich foreign students are vanishing. Jobs for graduates are falling and mental illness among students has reportedly multiplied by seven times in the past decade. The result is that in 2023, 63,000 young people went straight from studying on to receipt of sickness benefit, a figure double the pre-pandemic level.

Almost every statistic is grim. According to the Office for Students, 40% of English universities are running unsustainable deficits. Shitij Kapur, vice-chancellor of King’s College London, has predicted that this will rise to 80%, while only fees of £12,500 (up from today’s £9,250, fixed in 2017) would start to correct the crisis. There is no way this is going to happen: government is now punishing universities for its past generosity, while the lifeboat of foreign student fees has been destroyed by new visa controls. Universities such as Huddersfield, York, Coventry and Kent report severe deficits.

More serious is the result of the Major government’s 1992 upgrading of 33 polytechnics, which gave many cities not one university, but two. It led to a downgrading of technical and vocational training in favour of academic learning, and was followed by Tony Blair’s ambition to get 50% of young people into university. There is no doubt this did wonders for many provincial towns, but it was an extravagant pledge.

I have to wonder who advises governments on these seismic decisions. Britain now suffers from a chronic national shortage of skilled labour – in the NHS, public services, hospitality and construction – many of them jobs that would once have been done by people who are today at university. Meanwhile, job opportunities are shrinking for graduates. The research agency High Fliers reports a steady drop in recruitment among former graduate employers, by 6.4% in the past year alone. Graduates are simply losing their exclusive appeal.

Anyone lucky enough to have been to university hardly dares suggest there are too many graduates. For many, a university education is a good preparation for life, and one that boosts earning capacity for those who get good jobs afterwards. Whether this makes macroeconomic sense is a different matter. I vividly remember an economist visiting from China who spoke at London’s Institute of Education. He argued that university was a consumption good not an investment, and he was amazed that Britain was “so rich you can keep half your young people out of work for three years and make them drunk”.

An extra three years in education can of course be a source of cultural and personal enrichment. But there must some way of gauging value for money. Is three years at university really a better preparation for life than the same time in apprenticeship and employment? Is a full-time education from 18 to 21 better than an optional “sabbatical” at some later stage in life?

A more worrying figure must be the revelation that mental illness is soaring at universities. A surveyin 2022 for Student Minds has 57% of students reporting some such illness, with 27% actually diagnosed. A little-noted report this week from Boston Consulting Group estimates that graduates going straight on to sickness benefit is a large component of a soaring £19.5bn annual cost in benefit payments and tax losses.

Students say their mental illness is caused by anxiety at moving away from home, a lack of friends and mounting debt. There must be some for whom the traditional British university is simply not an appropriate home. They may not want or need an academic university education.

At this stage of their lives, most young people are ready to broaden their horizons and explore their options. To trap them for three years in archaically structured institutions isn’t always in their interests. Major’s decision to upgrade polytechnics, which led to the effective demotion of remaining technical colleges, was surely a mistake. Meanwhile, the privatisation of student housing has sent the Unite Group’s £4.7bn of halls of residences on to the stock exchange. Given that only a quarter of the £205bn in student maintenance loans may be repaid in full, this must rank as the biggest programme of social housing in Britain. Are students those most in need of it?

Universities clearly need root-and-branch reform. Someone should ask if formal education should stop at 18 and a flexible concept of “further” education take over. Is not one university per city enough? Shouldn’t some universities be polytechnics? If questions like these are being asked of the NHS, let them be asked, too, of higher education.

• Simon Jenkins is a Guardian columnist

• This article was amended on 13 September 2024. An earlier version incorrectly said that Lancaster University had reported severe deficits.