National Insurance Rise Leaves Welsh Universities with a £18 million a Year Bill

Information uncovered by the Welsh Liberal Democrats has shown that the UK Government’s decision to increase national insurance has left Welsh Universities with £18 million a year additional bill to pay.

According to the Welsh Liberal Democrats, this rise in employer costs threatens to deepen the existing crisis in Welsh higher education. Many institutions are already being forced to cut staff, close courses, and manage growing deficits in an increasingly difficult financial environment.

Following questioning by Lib Dem MP David Chadwick at the Welsh Affairs Committee today, Welsh universities admitted that the rise in national insurance contributions had come as a surprise to them and that the financial implications had added to an already poor environment Welsh universities are operating.

One Vice Chancellor admitted the national insurance hike had directly impacted their staff restructuring programme (staffing cuts) and their ability to meet pay rise demands by staff.

Cardiff University is set to be hit the hardest by the national insurance increase, with a predicted £6.7 million annual increase, while Swansea University will also face an additional £3.5 million burden each year.

The £6.7 million figure from Cardiff University represents the equivalent of 30% of the £22 million the university has said it needs to make in savings. 

Welsh universities are grappling with a perfect storm of falling student numbers, reduced real-terms funding, and rising operational costs. The UK’s exit from the EU has also led to a decline in foreign students, previously a large revenue source for Welsh universities.

The Welsh Liberal Democrats have stated that at a time when institutions are being asked to do more with less, the £18 million now having to be spent on meeting national insurance contributions could be far better spent supporting teaching, research, and student services or could have helped avoid redundancies being pushed through by almost every Welsh university currently.

Commenting, Welsh Liberal Democrat Westminster Spokesperson David Chadwick MP said:

"Labour’s jobs tax is yet another blow to Welsh universities, coming at a time when they’re already facing mounting financial challenges. It’s completely unacceptable that Welsh universities are now being saddled with millions in extra costs just to meet a tax increase that could and should have been avoided.

"Our universities are not just centres of learning, they are vital employers and economic drivers in their communities. At a time when we should be investing in higher education to boost innovation, create jobs, and attract talent, this government has chosen instead to place a punitive burden on them.

“That £18 million could have helped avoid some of the redundancies now being pushed through by universities right across Wales.

"This is why the Welsh Liberal Democrats opposed this rise from the start. Instead of investing in the future of our young people and protecting skilled jobs, Labour has chosen to penalise the very institutions that help power our economy and society."

ENDS