In recent times we have seen institutions freezing recruitment, closing programmes, offering voluntary severance schemes and, in some cases, making compulsory redundancies. Rising costs, changing government policies and uncertainty around international student recruitment are creating challenges for institutions of every size.
Yet discussions about financial sustainability often become discussions about financial cuts. While cost reduction may necessary, it is rarely sufficient on its own. A university cannot cut its way to long-term success.
Financial sustainability is not simply about reducing expenditure. It is about ensuring that resources are aligned with institutional priorities, that investments generate value and that the organisation remains capable of delivering its strategy.
With that in mind, here are ten questions every university might like to ask.
1. Are we paying enough attention to student retention?
Universities invest significantly in student recruitment.
Marketing campaigns, scholarships, outreach activities and recruitment teams all play important roles in attracting students. However, retaining existing students is often more cost-effective than recruiting new ones.
When a student leaves early, the institution loses future tuition income and, equally as important, the student leaves without achieving the qualification they originally sought. They do not become an alumnus, and they may not promote the university, reducing the “word of mouth” opportunity.
Improving student retention is one of the few areas where financial sustainability and student success are perfectly aligned. Better support and early interventions can benefit both the institution and its students.
2. Have we accumulated unnecessary bureaucracy?
Most universities have evolved over many decades and may be (very) inefficient.
As a university develops, committees are added, processes become more complex, reporting expands (running the risk that nobody reads them), functionality gets duplicated (leading, perhaps, to other more important functions not being done), and standard operating procedures become out of date. This move to inefficiency happens gradually and nobody notices it, but the cumulative effect can be substantial.
Staff frequently spend large amounts of time completing administrative tasks that add little value to teaching, research or student support. They feel busy, they work long hours and they feel that they are adding value to the institution, when the opposite may be true and a few simple changes could make significant, beneficial improvements.
KISS (“Keep It Simple, Stupid” or “Keep It Simple and Straightforward“) is not a bad principle to have at the back of your mind, as you are planning how to make your institution more efficient.
3. Do we really understand how academic time is being used?
Academic staff are a valuable resource in most universities.
However, many institutions have only a partial understanding of how academic time is actually spent. Teaching, research, administration, supervision, community engagement, accreditation activities and committee work all compete for attention.
But, without good information, it becomes difficult to allocate these resources effectively. Indeed, even the academic staff may struggle with their own time management and their work/life balance.
This is one reason why workload models continue to attract so much attention. While no model is perfect, institutions that understand how academic effort is distributed are often better positioned to make informed decisions.
This is not about piling even more work on the academic staff. It’s about using this (and let’s be honest, expensive) resource as effectively as possible.
4. Are we making full use of the data we already collect?
Universities generate enormous quantities of data.
Applications, enrolments, progression rates, room utilisation, research performance, graduate outcomes and financial information are all routinely collected. Yet many institutions struggle to transform data into actionable insights.
Better forecasting can improve student recruitment planning. Better space utilisation can reduce estate costs. Better programme analysis can identify areas of growth and areas of concern before they become significant problems.
The challenge is rarely a lack of data. The missed opportunity is using data to support effective decision-making. This may mean collating data from various sources, cleaning it and using the right tools to analyse it. If done correctly, this can lead to insights which were not possible before.
In 2006, Clive Humby said “Data is the new oil”[1]. Although there has been some recent push back on this[2] we generate more data than ever before and we have access to more data than ever before. The question is, are universities getting all they can from, not only the data it generates, but also by consolidating that data with other sources at its disposal in order to inform its decision making processes?
5. Are we making the most of our alumni community?
Many universities view alumni primarily as potential donors.
While philanthropy is important, alumni can contribute in many other ways. They can support student recruitment through advocacy. They can provide mentoring opportunities. They can help create industry partnerships and improve graduate employability. They can strengthen the institution’s reputation through their own professional achievements.
A strong alumni network is an asset that continues to grow long after students graduate.
Looking back at point 4, this is an area where data is often lacking as universities have not routinely collected it and/or kept it up to date. If you are not doing this, start doing it now. As part of your next graduation ceremony, don’t just mention from the stage how important the graduates are, but make sure you record all the data you can and start a regular dialogue.
6. Does your programme portfolio still reflect your strategy?
Most universities regularly add new programmes. Far fewer review existing programmes with the same level of scrutiny. This leads to programmes, with very few students, which you have to teach/support, even to a handful of students.
Institutions should periodically ask whether programmes continue to align with strategic priorities, student demand and future workforce needs. Ask though hard questions, get feedback from students and take action where necessary, whether that is updating the programme or closing it down; perhaps to be replaced with something more relevant.
7. Are there opportunities to collaborate rather than duplicate?
Universities often take pride in their independence.
Yet, many institutions are investing in similar systems, services and infrastructure. There may be opportunities to share specialist facilities, procurement arrangements, digital platforms or administrative services with partner institutions.
Collaboration does not require institutions to abandon their identity. In some cases, it can strengthen it by allowing resources to be focused on areas of genuine differentiation.
It is not a weakness to reach out to others to ask if they would be interested in collaborating in areas that would be a win-win for both institutions.
8. Are we making the best use of our estate?
Buildings are expensive to maintain.
Teaching spaces, laboratories, offices and specialist facilities represent significant long-term investments. Yet utilisation rates can vary considerably across campuses and throughout the academic year.
Before investing in new buildings, universities should understand how effectively existing space is being used.
Improving utilisation can increase capacity, reduce costs and delay the need for major capital expenditure. You may even be able to reduce the size of the campus footprint, saving in areas such as maintenance as borrowings.
9. Are we investing in technology for the right reasons?
Technology is often presented as a solution to financial challenges.
Sometimes it is. Sometimes it simply moves costs from one part of the organisation to another.
The key question is whether technology improves productivity, enhances decision-making or removes repetitive work. When implemented effectively, digital systems and AI-enabled tools can create significant efficiencies.
However, technology should support strategy, not substitute for it.
The objective is not to digitise existing inefficiencies. It is to improve how the institution operates.
It is also the case that implementing IT projects can start off looking cost-effective, but can quickly spiral out of control[3], so ensure that you have effective project planning and controls in place before embarking on a major IT project.
10. Are we trying to do too much?
This may be the most important question of all.
Universities are continually asked to expand their activities. New initiatives, new partnerships, new programmes and new priorities emerge every year. Individually, each initiative may appear worthwhile. Collectively, they can create an organisation that lacks focus.
Financial sustainability is not always about finding additional income or reducing expenditure. Sometimes it is about making clearer choices.
Institutions that understand their purpose, focus on their strengths and align resources with strategic priorities are often better positioned to navigate uncertainty.
Final Thoughts
There are no simple solutions to the financial challenges facing higher education. In some cases, difficult decisions will be unavoidable. However, financial sustainability should not be viewed solely through the lens of cost reduction.
The strongest institutions are not necessarily those with the largest budgets. They are often those that deploy their resources most effectively.
The question for university leaders is therefore not simply how to spend less. It is how to ensure that every pound (ringgit, dollar, euro etc.) contributes to the institution’s mission.
Financial sustainability is ultimately a governance challenge. It requires leaders to make informed choices about priorities, resources and long-term direction.
The universities that navigate the current period most successfully may not be those that cut the deepest, but those that think the most carefully about where they create value.
About the author
Professor Graham Kendall is Acting Vice-Chancellor of GlobalNxt University, Malaysia, and an Emeritus Professor of the University of Nottingham.
He has held senior leadership positions in higher education for more than fifteen years, including roles as Vice-Provost, Provost, Chief Executive Officer, Deputy Vice-Chancellor and Vice-Chancellor. His experience spans university governance, strategy, research management, internationalisation and institutional performance.
Through this newsletter, he shares perspectives on higher education governance, leadership and research. He also works with universities on strategic planning, rankings, research performance, governance reviews and institutional development.
If your institution is exploring any of the issues discussed in this article, he welcomes opportunities for dialogue and collaboration.
[1] https://www.theguardian.com/technology/2013/aug/23/tech-giants-data, accessed 30 May 2026
[2] https://www.bcs.org/articles-opinion-and-research/why-data-isn-t-the-new-oil-anymore/, accessed 30 May 2026
[3] Flyvbjerg, B., Budzier, A., Aaen, J., Keil, M., & Zottoli, M. (2026). The Uniqueness of IT Cost Risk: A Cross-Group Comparison of 23 Project Types. Project Management Journal, 57(1), 14–43. https://doi.org/10.1177/87569728251340590