Unlocking value and elevating university performance amidst heightened sector turbulence.

The landscape for higher education in the UK has shifted dramatically. Universities face one of the most challenging financial environments in living memory, with the Office for Students (OfS) warning that as many as three-quarters of English providers could be in deficit by 2025–26 without significant intervention. Already, 43% of universities are forecasting deficits in 2024–25, leaving governing bodies and executives under pressure to act decisively. This article discusses the advantages of universities embracing an easy-to-access, simple, and cost-effective approach to financial benchmarking as a strategic necessity, as recommended by the recent UUK Transformation and Efficiency report. 

The sector is experiencing multiple, simultaneous shocks: 

• International student crisis – Recruitment is running 21% below forecasts, severely impacting universities reliant on international fees to cross-subsidise domestic teaching and research. 

• Significant job losses – many institutions have announced widespread staff reductions. 

• Government funding squeeze – Policy decisions, despite a headline tuition fee uplift to £9,535, equate to a £1.4bn net reduction in funding by 2025–26. Increases in employer National Insurance contributions alone will add £430m in extra costs to the sector. 

• Consolidation risk – With speculation of possible bailouts, sector leaders and commentators warn that mergers and controlled capacity reduction may become inevitable. The University of Greenwich and University of Kent have already announced a merger under the proposed name of London and South East University Group, from 2026, as they seek to respond to significant financial challenges in the sector. 

Against this backdrop, the recent UUK Transformation and Efficiency report calls for universities to harness financial benchmarking not as an optional diagnostic tool, but as a strategic necessity. Senior leaders are being urged to scrutinise their cost base with greater clarity than ever before, armed with evidence robust enough to support both institutional survival and long-term renewal. 

It’s precisely here that Etio’s financial benchmarking model stands out as a proven, trusted, low burden and actionable solution. 

A proven, trusted methodology

Etio’s approach has been built on years of sector engagement and offers three distinctive advantages: 

1. Comprehensive data capture – Every item of income, expenditure, staff FTE and non-pay costs is systematically categorised, recognising the structural nuances of different university models. Unlike approaches that rely on perception or self-reporting, Etio’s consultants work directly with your university but will retain the heavy-lifting of translating your institution into a single lens, ensuring data rigour and credibility, but in a low-burden manner. 
2. Robust yet flexible approach – The strength of our approach lies in applying a consistent framework with full visibility of every process, enabling us to deliver timely and credible outputs without unnecessary complexity. Around this backbone, the way we capture data, engage with the university, and present key messages retains the agility to flex within clear guardrails, balancing rigour with adaptability, and allowing us to adjust our approach to fit each university’s needs, whether that calls for a lighter touch or a more prominent presence. 
3. Easy to engage with – Etio’s Benchmark+ online platform makes complex data intuitive and actionable, allowing institutions to explore their results without a resource-heavy or cumbersome process. Supported by Etio consultants, leadership teams can quickly identify key insights and understand which levers will have the most material impact. Activity is categorised with sufficient granularity to avoid lengthy debates over arbitrary allocations, while the process remains straightforward and the analytical lens clear. This balance of depth and simplicity ensures cross-institution buy-in, streamlines message delivery, and enables university leaders to make informed decisions or target further analysis with ease.  

What universities gain from the Etio benchmarking model 

In an era of tightening finances, the benefits of robust benchmarking extend far beyond cost-cutting spreadsheets. Universities that engage with Etio’s cost-effective, easy-to-access, and appropriately detailed model gain: 

• Visibility on true costs – Etio does the heavy-lifting by capturing both central and decentralised spend, revealing the real cost of academic delivery and professional services. Leaders can assess whether expenditure is proportionate, or fragmented and inefficient. 

• Confidence in critical decisions – Whether testing staffing models, validating strategic investments, or reshaping cost reduction programmes, benchmarking provides evidence strong enough to withstand scrutiny from councils, regulators, and unions alike. 

• Support for transformation – Etio’s assessments are invariably used to inform institutional change and transformation, informing service redesign and sustainability plans while ensuring alignment with strategic ambitions. 

• Buy-in across the institution – Through a newly streamlined, low-burden approach to engaging faculty and service leaders collaboratively, Etio ensures the data is not only accurate but also understood, trusted, and owned—a critical enabler in turbulent times. It’s something we’ve honed over the many years we’ve been benchmarking UK universities.  

Real-World Examples from Across the Sector 

• University of Nottingham – Undertakes biennial benchmarking with Etio, embedding the process into planning cycles and using the insights to shape institutional change programmes, reset staff establishments, and track progress through an evidence-based cycle. 

• Massey University (New Zealand) – As part of the contract with NZ Tertiary Education Commission to provide annual performance benchmarking for all universities (as cited in the UUK Transformation and Efficiency Taskforce’s 'Towards a New Era of Collaboration' report, p48) the university benefited from dual benchmarking, combining financial and educational outcomes, to provide a comprehensive and strategic view of institutional effectiveness, whilst generating intelligence not just for institutional leadership but for government-level planning across the tertiary sector. 

• Durham University – The university sought an alternative benchmarking solution to provide clear, actionable and affordable insight. The outcome from the project was a forensic assessment of the university’s cost base across all professional services and academic functions, which revealed the real cost of delivering each area of operation compared to sector trends and peer groups. These outcomes were used to inform the size and shape of the university’s cost base, to improve financial sustainability and support budget setting to achieve financial targets. 

• Cardiff University – After disengaging from an alternative benchmarking provider, Cardiff integrated Etio’s methodology successfully over three successive projects, embedding evidence-led decision-making into business-as-usual practice. 
  
  

Why This Matters Now 

The higher education sector is navigating a perfect storm of financial distress, policy headwinds, and demographic uncertainty. Quarter-on-quarter redundancies have placed reputations and morale at risk, while volatility in overseas recruitment exposes institutions to levels of financial fragility unthinkable just a decade ago. 

In this landscape, assumptions are dangerous. Reliance on historic norms or untested efficiency drives risks eroding the very services that underpin teaching quality and student success. A clear-eyed, evidence-based understanding of the cost base is essential—not only for survival but for sustainable transformation. 

Etio’s benchmarking offers that anchor. It separates fact from opinion, distinguishes efficiencies from cuts, and highlights areas where investment is not just possible but strategically vital. In doing so, it equips leadership teams to weather volatility, restore financial resilience, and demonstrate accountability to staff, students, and government alike. 

Final Thought 

For university leaders and governing bodies, the choice is clear: to risk navigating blindly in a period of turbulence; or lead on the basis of low-burden, credible data and sector-wide comparison that provide evidence-based and actionable insight. As UUK’s Transformation and Efficiency report makes evident, robust benchmarking is now a strategic lever for universities—not a “nice to have,” but a necessity. Etio’s proven low-burden methodology, global reach, and collaborative approach offer a way forward: helping institutions adapt, strengthen, and secure a sustainable future even amid the sector’s most daunting challenges in decades. 

Authored by: Phil Moseley & Helen Dove

To discuss a low-burden approach to benchmarking at your university, or collaborative group of institutions, get in touch with Etio’s Benchmarking specialists.