A model to evaluate the financial and operational risk of the UK universities

Tsiligkiris, V ORCID: https://orcid.org/0000-0002-5478-3464, Vishwanath, K ORCID: https://orcid.org/0009-0003-0566-499X and Cheah, J ORCID: https://orcid.org/0000-0003-2953-3815, 2026. A model to evaluate the financial and operational risk of the UK universities. Higher Education Quarterly, 80 (1): e70094. ISSN 0951-5224

Text 2536376_Cheah.pdf - Post-print Full-text access embargoed until 8 December 2027. Download (533kB)

Abstract

The UK higher education sector plays a pivotal role in economic and societal development, generating significant financial returns, fostering innovation, and addressing workforce needs. However, the sector faces mounting challenges threatening its financial and operational resilience. These challenges include declining real-term domestic tuition income, increasing reliance on volatile international student markets, and escalating operational costs. This study develops a framework to assess the financial and operational risk of UK universities, employing indicators such as liquidity days, net operating cash flows, recruitment power, and student satisfaction rates. Using data from 2016–2023 and linear regression models for projections, and machine learning random forest for validation, the study categorises universities into four risk tiers: Stable, Moderate Risk, At Risk, and Critical Risk.

Findings reveal a substantial proportion of universities are in moderate to high operational risk tiers, with financial vulnerabilities projected to increase, particularly under declining international enrolments. The interplay between financial and operational risks exacerbates sector-wide instability, threatening long-term viability. The study highlights the urgent need for diversified revenue streams, cost efficiency, and strategic interventions to mitigate risks. This framework offers actionable insights for policymakers and university management, ensuring institutions maintain their critical contributions to the economy and society amidst an evolving higher education landscape.

Item Type:	Journal article
Publication Title:	Higher Education Quarterly
Creators:	Tsiligkiris, V., Vishwanath, K. and Cheah, J.
Publisher:	Wiley
Date:	January 2026
Volume:	80
Number:	1
ISSN:	0951-5224
Identifiers:	Number Type 10.1111/hequ.70094 DOI 2536376 Other
Rights:	This is the peer reviewed version of the following article: Tsiligkiris, V., Vishwanath, K., & Cheah, J. (2026). A model to evaluate the financial and operational risk of the UK universities. Higher Education Quarterly, 80(1), e70094, which has been published in final form at https://doi.org/10.1111/hequ.70094 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Borcherds
Date Added:	25 Nov 2025 17:38
Last Modified:	21 Jan 2026 08:37
URI:	https://irep.ntu.ac.uk/id/eprint/54806

Actions (login required)

Edit View

Statistics

Views

Downloads