Education outlook: Consolidation, collaboration and sustainability key to future growth in 2025

16 December 2024

Lisa Randall, partner and national head of higher education at RSM UK, comments: “The outlook for education in 2025 will be closely tied to consolidation, with the Office for Students (OfS) reporting that 72% of universities in England may encounter financial shortfalls by 2025-26. This is due to declining international student recruitment, fewer undergraduate entrants, and the impact of increased National Insurance contributions, adding £372m annually to universities' staffing costs.

“As institutions face financial pressures and changing demographics, there is an increasing emphasis on creating more efficient and sustainable education systems. This will involve combining resources, streamlining administration and developing stronger industry relationships to provide students with relevant skills and opportunities which align with the government’s plans for growth-driving industries. By working together, universities and colleges will be better positioned to provide students with accessible progression routes to higher education, supporting OfS proposals for a new national collaborative outreach programme.

“Given the changing profile of higher education students, it’s a good opportunity for universities to change their focus towards local communities. This will help to break down barriers to learning and upskilling by encouraging students to explore academic opportunities close to home. This shift would also reflect students’ expectations of a university experience, which have evolved to include hybrid and flexible learning, technology integration for learning and engagement, sustainability, and feeling prepared for employment.”

Richard Lewis, partner and national head of further education, skills and academies at RSM UK, added: “Despite the pressing issue of financial sustainability, it’s important to acknowledge the positive impact education establishments have on communities. They contribute to education and skills development which support individuals with personal and professional growth, while also encouraging lifelong learning.

“The introduction of Skills England further demonstrates their role in realising the government’s aim to address skills shortages and drive sustainable economic growth by providing education which aligns with the country’s skills needs. Education institutions already collaborate with local businesses and communities to meet the needs of their respective regions. This shows the sector is already a step ahead of the government’s plans for developing local infrastructure and ensuring young people are well connected with industry and employers.

“However, there is still work to be done and the future of the education sector hinges on sustainability – achieved by implementing more efficient and consolidated models which better serve students and the economy. Alongside consolidation and further collaboration, long-term growth requires government funding. This will enable schools, colleges and universities to stop plastering over the cracks and commit to transformational change by investing in facilities, people and decarbonisation to build an efficient and sustainable education system.”

Lisa  Randall
Partner, Head of Higher Education
Richard Lewis
Partner, Head of FE, Skills and Academies
Lisa  Randall
Partner, Head of Higher Education
Richard Lewis
Partner, Head of FE, Skills and Academies