The Cardiff crisis of the 1980s: what lessons for UK universities today?

A dire financial position at University College, Cardiff in the 1980s required an emergency response from the highest levels of UK government. Now, four decades on, Cardiff University and many other higher education institutions face a similar crisis – and may also require some kind of rescue.

The 1963 Robbins Report launched a period of rapid expansion for the UK’s universities. By the early 1980s, the first signs that this golden era was coming to an abrupt end emerged in Wales, when it became clear that the dire financial position of University College, Cardiff (UCC) would require an emergency response from the highest levels of UK government.

This year, Cardiff University has again provided a dramatic indication of the seriousness of the challenges facing universities. Was nothing learned from the first time around?

University funding challenges

In May 1984, the government’s funding body for higher education asked UCC what it was going to do about a catastrophic financial position that risked its very future. The answer it received became famous for being one of the briefest and most idiosyncratic responses to an official government questionnaire. In the second of seven short paragraphs, the college’s reply said: ‘KBO. Keep buggering on; that is what Cardiff proposes to do’.

That remark was characteristic of the man who made it, the controversial principal of UCC, Bill Bevan, and whose ‘buggering on’ over several years had helped to create what became known in Whitehall as the ‘Cardiff crisis’. UCC’s institutional dysfunction, mounting debt and possible closure prompted a government intervention in the university sector that was unprecedented.

The way in which the crisis was resolved – with the ousting of UCC’s principal and a humiliating, enforced merger with a local technical college – turned out to be the making of what became Cardiff University, propelling it into the elite Russell Group of research-intensive universities. But 35 years later, there are concerns that the institution’s future, like that of many others in higher education, is in jeopardy. This is due to financial challenges alongside accusations of leadership being ill prepared to meet them.

The events that led to the Cardiff crisis are worth revisiting because some of the themes they highlight are repeating themselves, suggesting some persistent vulnerabilities: economic turbulence, big policy swings and management failures. The case became notorious, but if Cardiff was also a cautionary tale, have its lessons been fully absorbed or are they long forgotten?

Today, with 90 UK universities announcing ‘restructuring’ plans due to mounting deficits, there have been predictions of up to 10,000 redundancies or job losses. Those who have been warning that higher education has long been heading in the wrong direction are demanding a radical rethink.

Figure 1: Percentage of higher education providers in deficit in England, 2018-25

Source: Office for Students

University College Cardiff in the 1980s

After a period of rapid expansion following the 1963 Robbins Report (delivered by the Committee on Higher Education, chaired by economist Lionel Robbins), universities first started to feel chilling economic winds in the mid-1970s, when stagflation took hold. The body responsible for allocating government money, the University Grants Committee (UGC, a predecessor of the UK’s higher education funding councils) responded by slashing capital funding, bringing new building virtually to a halt.

But it was the election in 1979 of a Conservative government determined to cut public expenditure and reduce the size of the state that ushered in a decade or more of austerity. Margaret Thatcher’s government imposed a cap on university funding and signalled that it would be reduced by up to 15% by 1981, with more cuts to come. The UGC realised that the days of leaving universities to sort out their problems themselves were now over: it would have to manage higher education a lot more actively.

In the Welsh capital, UCC had been enjoying an impressive ten years up to 1975, with student numbers almost doubling to 5,000, and new buildings and academic centres established, under the leadership of Bill Bevan. His vision of higher education was being praised then as both highly principled and practical.

But trouble was brewing. By the early 1980s, the college’s deficit was growing, following the first of the UGC’s cuts to its annual grant. The coming crisis could have been mitigated or even averted if Bevan had agreed to serious countermeasures, including 20-30 job losses. But for the next few years, helped by his domination of the college’s decision-making processes, UGC circulars advising belt-tightening were ignored and no radical action taken.

Bevan was also defending his idea of academic freedom, diversity and quality. He was opposed to what he saw as the accelerating marketisation and commercialisation of higher education, especially with the arrival of a Conservative government. After all, he had been principal in 1970 when historian EP Thompson’s controversial Warwick University Ltd was published, a book that criticised the model of higher education being developed there as, among other things, too narrow and business-oriented.

By 1985, the financial situation at UCC became impossible to ignore. In a staff newsletter, senior managers explained that the college’s plans to deal with deficits had been upset by several factors. Some of these are likely to be familiar to today’s vice-chancellors: there had been increases in inflation and taxation, including national insurance; overseas income was down substantially, due in UCC’s case to an over-reliance on Nigeria, where a recent coup had cut off the supply of students. There were also the increased costs of the college estate.

The result was that the accounts for the financial year 1984/85 would show an accumulated deficit of £3.5 million, almost £11 million at today’s prices. An expected outcome was the loss of up to 100 jobs.

Inaction continued until 1987, when the government was forced into a dramatic intervention. The Department of Education and Science threatened to withhold UCC’s grant unless an external team of financial experts – led, ironically, by the registrar of the University of Warwick, Michael Shattock – was allowed in to assess what could be done. Bevan was forced into a sabbatical.

Shattock concluded that the only way to prevent the first closure of a UK university was to merge UCC with Cardiff’s up-and-coming University of Wales Institute of Science and Technology (UWIST), under a new principal acceptable to the latter (namely, UWIST’s principal, Aubrey Trotman-Dickenson) and, in the meantime, to allocate £10 million of emergency funding to UCC.

By now, the crisis had reached the highest levels of government. The secretary of state for education, Kenneth Baker, and the secretary of state for Wales, Nicholas Edwards, only just managed to sell the rescue plan to prime minister Thatcher. According to Edwards, she had earlier ‘… sent out a furious minute around Whitehall saying there should be no question of bailing out the bankrupt college and that an example should be set to the whole university world’. But as Edwards recalled in his autobiography, this was an election year and ‘… the thought of having several thousand academics and students thrown onto the streets of Cardiff during an election campaign was clearly not attractive’.

A merger between UCC and UWIST had long been mooted, but the latter, having done its due diligence on the accounts of the more prestigious college, had baulked. While some at UCC had looked down on UWIST as an upstart ‘tech’, the institute had, in many ways, been far better managed.

In his study University Management in an Era of Strategic Change, Gethin Williams writes that the contrast in approach of the two principals not only dictated the fate of their respective institutions, but it was also an example that the entire sector was encouraged to note:

‘So it was that when the universities were faced with hard times, UWIST proved better able to cope. Its structures, processes and standard operating procedures, its institutional culture, the style of management adopted and general ability to cope were in much closer correspondence with the demands of the external environment than… UCC.’

The debacle effectively resulted in a reverse takeover, with UCC losing around 140 jobs and having to adopt the statutes and constitution of UWIST. Bevan was replaced with Trotman-Dickenson. In the process, a message was delivered to other higher education institutions: adapt or die.

Back to the future

Thirty-six years later, Cardiff University, as it is now called, is once more making headlines and again for the wrong reasons. After a long and successful period of expansion in student numbers, buildings and prestige (it joined the Russell Group in 1998), the university announced in January 2025 that due to a £31 million deficit, it needed to lose 400 jobs and close entire degrees and departments. The number of job losses has recently been revised down to 286 jobs following voluntary redundancies, but discussions of departmental closures or mergers remain.

Figure 2: Cardiff University operating surplus/deficit, 2015-24

Source: Cardiff University Financial Information

In its Academic Futures document sent to staff, the vice-chancellor states that it is time for Cardiff to become a smaller university, recruiting fewer domestic students and upholding the tariffs (entry barriers) expected of an ‘elite’ university.

Cardiff is one of many universities citing similar reasons for mounting deficits. According to Universities UK, they include: ‘the broken fee-based funding model’; ‘unhealthy competition’ in the recruitment of students; ‘policies that make the UK a difficult choice for international students’; and ‘governance’.

It is always difficult to make comparisons over time and also then to apply them to a whole sector. But are there instructive echoes of the past in what is happening today?

Bill Bevan ran UCC’s affairs in an autocratic and opaque way, allowing him to avoid early, corrective action. Almost 40 years later, governance issues and allegations of mismanagement are again present, with Cardiff University staff wanting to know how, exactly, an operating surplus of £28 million in the financial year 2020/21 has been allowed to become a predicted deficit of £65 million next year.

Glen O’Hara, a historian at Oxford Brookes University, believes that the entire university sector is experiencing a ‘crisis-driven approach’ when a ‘managed retreat’ is what is required instead. Writing in the Financial Times, he adds: ‘It is very likely that there will be at least a handful of institutional failures, though they may be dressed up as “mergers” or “reorganisations”’.

O’Hara also predicts that universities are effectively ‘thinning’ themselves out, as courses that do not bring in enough revenue are abandoned. The result is ‘a lesson in how not to manage anything’, he says. At the same time, he does indicate that ultimate responsibility lies elsewhere: ‘neglect your core business – in this case, teaching home undergraduates – at your peril. That’s the disastrous strategy the UK governments have forced universities into’.

In light of all this, there are some now who look back on Bevan’s reign and wonder whether, despite the serious flaws in his later years as leader and administrator, his warnings about the direction that universities were taking seem prescient. The ending of state-funded tertiary education in favour of fees, together with opening up the sector to internal competition, have been hugely damaging, according to this view.

Bevan was fighting for the idea of an autonomous university that delivered the full range of courses from humanities to more practical subjects and where the emphasis was on high-quality, innovative teaching. He dismissed the troubleshooters sent by Whitehall as ‘bean-counters’. While he clearly should have done more bean-counting himself, he now has his defenders who say that more principals should have joined his rearguard action and stood up against the trends that have resulted in a crisis that today goes much wider than the one in Cardiff.