New universities threatened by high spend

The existence of newer British universities is threatened by global competition forcing them to spend more, a report by Standard and Poors states.

The analysis warns of "certain universities ceasing to exist" because of increasing competition from China and India and within the UK.

The analysis suggests tha research-intensive universities will be in a stronger position than newer, more teaching-focused universities will struggle.

"From a credit perspective, the UK higher education sector has made positive strides over the past few years, but faces increasing risks in the medium-to-long term," the report states.

"Although we view universities in general as benefiting from strong government support, individual universities may be allowed to fail, particularly when there is insufficient student demand," it warns.

Predicted demographic decline is unlikely to affect demand for leading universities, the report concludes. "Instead, any effect is more likely to be felt by the newer, less research-oriented universities.

"Such universities may well need to look abroad for their recruitment, and also diversify their offering to include more adult education and professional courses, if they are to maintain current levels of activity."