University financial position update

Last updated: Tuesday 22 July 2025

Context

• UK higher education is facing an extremely difficult environment, due to factors including long-term underfunding of home undergraduate students and research, high inflation, and ongoing volatility in international student recruitment.  
• Durham University remains a world-leading university that attracts and retains the best researchers, teachers, students, and professional services staff.
• In November 2024, the University announced in-year cost-saving measures, including reducing energy use, phasing planned capital expenditure, managing stringently staff vacancies, reducing hospitality expenditure, restricting non-essential travel and reducing the use of external consultants. A Voluntary Severance (VS) scheme was also offered during 2024.
• Subsequently, the University for the first time reported an underlying operational deficit. Although this was planned and agreed with the governing University Council, the University must return to surplus.

Voluntary Severance (VS) scheme

• In January 2025, the University announced its intention to reduce staff costs by £10m in professional staff costs in the academic year 2024/25; and its proposal to seek a further £10m reduction in staff cost (£5m in professional staff costs and £5m in academic staff costs) in the academic year 2025/26. It was estimated that in the current academic year, this may have equated to a figure of around 200 professional services staff posts.
• Strenuous efforts have been made to secure these savings through voluntary means, through a Voluntary Severance package.

Update, Tuesday 22 June 2025

• On Tuesday 22 July 2025, we informed colleagues that we have achieved £3.8m of the two-year £5m savings target for academic voluntary severance VS. We have around £1.2m of savings to find in the next academic year and are considering how best to address this shortfall.

• On Wednesday 11 June 2025, we informed colleagues that we had reached the overall savings target of £15m from professional services staff costs.  

• This has been achieved through a combination of staff vacancies and accepted voluntary severance applications.

• To ensure our long-term financial sustainability, and to deliver the University Strategy, we must continue to be as effective as possible and to realise efficiencies where we can.  

Professor Karen O’Brien, Vice-Chancellor of Durham University, said: “To remain a world-class centre of research and education, we must have a firmly established and financial base.

“We have always said that we would prioritise our excellent education, research and frontline student support, and retain our capability for ongoing income generation. We continue to follow these principles.  

“We appreciate that the financial measures we have been taking have been a source of uncertainty to our colleagues. We are grateful for their continued commitment and support during this time.

“For some, the decision to accept VS marks the end of many years of dedicated service. We appreciate all these colleagues have done to advance our University and ensure its success and sustainability.

“The financial challenges we and others across the sector face remain acute. International student recruitment remains volatile. Other costs continue to rise.   

“To manage costs, in addition to our voluntary severance programme, we have a separate and stringent target for non-staff savings this year and will have a further target as part of budget setting for the next financial year.

“We will continue to work with our campus trade unions and to listen to our staff and student community and keep them updated.”