The Office for National Statistics (ONS) has previously announced its intention to review the statistical classification of universities in the UK as follows:
- an announcement of the classification review of universities in the UK on 31 January 2017
- a further statement on the classification review of universities in the UK on 5 April 2018
- an overview of planned developments in the public sector finance statistics, including an update on the classification of universities, on 21 December 2023
- a response to a parliamentary question on the classification of universities on 15 January 2024
This work was delayed as we were awaiting the government's conclusion on the Post-18 Education and Funding Review. This conclusion was published in 2022, announcing several reforms to higher education and launching consultations on related policies. However, in the years following, there were a large number of priority classification decisions to be made quickly in response to the coronavirus pandemic and the government measures on energy prices.
The universities review will therefore now commence in early 2025 and will concentrate on the statistical classification of the transactions in which UK universities engage. Our focus will be to classify the main income sources of UK universities as published by the Higher Education Statistics Agency, including tuition fees and education contracts, research grants and contracts, funding body grants, and other income sources. These income sources are important, especially with regard to more research-intensive universities - see the section on treatment of wider higher education funding in Looking Ahead - developments in public sector finances: 2019.
We will determine the statistical classification of each transaction in the context of internationally agreed statistical guidance as described in the United Nations System of National Accounts 2008, along with the European System of Accounts 2010 and the accompanying Manual on Government Deficit and Debt 2022 where useful and appropriate. The classification assessment will encompass all countries in the UK, recognising that these income sources may be different for each country.
Most UK universities have been classified to the non-profit institutions serving households (S.15) sector in the UK National Accounts. At this point, we are not reviewing the sector classification of universities. The economic statistical classification will ensure that transactions are correctly recorded in the relevant statistics and will also help inform whether some universities should be considered to be market bodies. The classification of transactions is therefore an important first step that will enable the sector classification status of universities to be reviewed against other classification priorities in future.
The outcomes of this review will inform future research into legislation and guidance relating to the sector classification of universities. Please refer to our monthly Forward Work Plan for the latest updates on upcoming classification work.
The Office for Students (England) and the Scottish Funding Council (Scotland) have already been classified by the ONS, details of which can be found in the Public Sector Classification Guide. This function in Northern Ireland is included in the scope of the Department for the Economy (Northern Ireland).
The review is expected to be completed within 12 months and classification decisions will be published in the Public Sector Classification Guide when reviews of all four countries have been completed.
Please refer to our monthly Forward Work Plan for the latest updates on this review for each country. Should you have further queries not addressed by the Forward Work Plan, please contact econstats.classifications@ons.gov.uk.