Dutch universities are facing a financial crisis, with the 14 largest institutions reporting a combined loss of €105.3 million in 2023, according to an analysis by EY. The rising costs of staff and accommodation are the main drivers behind these losses, explained Maarten Verschoor, chairman of EY Society and lead accountant for the study. "Only four universities managed to stay out of the red last year," he added.
Looking ahead, the financial situation is expected to worsen before it improves. The forecast for 2024 predicts a staggering loss of €257.2 million, although this figure is projected to shrink to €105 million by 2025. Dutch universities hope to return to profitability by 2026, but significant cost-cutting measures will be necessary to achieve this goal.
To curb the escalating losses, universities plan to implement deep cuts in both staff and housing expenses. "This will likely result in larger class sizes, with more students per lecture," said Verschoor. The rising costs have placed immense pressure on universities, forcing them to reassess their spending on personnel and infrastructure.
Additionally, the financial forecasts do not account for the latest economic estimates, which could further worsen the outlook. "There is still a chance that the final figures could turn out more negative," Verschoor warned.
The new Dutch government’s plans to make significant cuts to higher education are also expected to impact the financial stability of universities. Among the proposed changes are reductions in the number of international students, a move that could have long-term effects on university revenue streams.
"The planned budget cuts will need to be even more severe if universities are to return to profitability," said Verschoor. The combination of these cuts, rising costs, and increasing student numbers presents a complex challenge for the sector as it navigates the next few years.
As the financial situation worsens, universities will be under intense pressure to balance budget cuts with maintaining educational quality and access. The effects of these challenges are likely to be felt across the higher education system, with students and staff bearing the brunt of the changes in the coming years.
