The government's own advisers have warned that the state of university finances poses a "material strategic risk" to delivering its industrial strategy, and have urged ministers to take "radical action" in response. The warning comes in the first annual report of the Industrial Strategy Advisory Council, published on 5 November 2026, one year after the government's ten-year Modern Industrial Strategy.

The council, chaired by Clare Barclay, Microsoft's president for enterprise and industry in Europe, the Middle East and Africa, with former University of Manchester vice-chancellor Nancy Rothwell as deputy chair, says financial and capacity constraints in higher and further education threaten the strategy's goals. It calls for "radical action, likely including an independent review of the sectors' sustainability", recognising the broad role universities and colleges play in skills, research, innovation and regional growth.

The report notes that more than a third of English higher education providers already reported a deficit, while colleges face rising demand: the 16-to-18 population is projected to grow by 70,000 between 2025 and 2028, and colleges could need up to 12,400 additional teachers by 2028-29.

The Russell Group's chief executive, Libby Hackett, backed the warning, saying it was "spot on" and that university finances "does constitute a material strategic risk to the UK's economic growth".

Separate evidence underlined the pressure on the sector's buildings: a long-delayed Research England report put the maintenance backlog for research infrastructure at about £5.3 billion, with a quarter of the research estate needing major repairs within three years or inoperable.

The council's wider message was that the industrial strategy remains the right plan, but change is not happening fast enough on the fundamentals holding back investment, including high industrial energy costs, skills shortages, complex regulation and planning, and uneven access to finance.

[Source: timeshighereducation.com](https://www.timeshighereducation.com/news/industrial-strategy-advisers-urge-radical-action-he-finances) | [Source: gov.uk](https://www.gov.uk/government/publications/industrial-strategy-advisory-council-annual-report-2026)