The University of Nottingham has recorded a deficit of more than £80 million after property experts valued its for-sale campuses at significantly less than they were previously thought to be worth. 

Facing financial challenges, the institution recently revealed that it is seeking to sell its Castle Meadow campus in Nottingham city centre, despite spending £80 million on the site since purchasing it in 2021.

Formerly used as HMRC offices, it has been criticised as a “vanity project” and blamed by unions for the university’s job cuts.

Nottingham’s financial statements show that it recorded an adjusted financial deficit of £85.3 million in 2024-25 – which was a significant deterioration on the £17 million deficit of last year.

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The accounts say the deficit, which excludes any movements in pension valuations, was largely the result of a £74.8 million “impairment” of fixed assets incurred during the development of its “estates master plan”.

As part of plans to reduce the size of its estate, one of the largest in the sector, the university sought updated valuations on assets for sale, including the Castle Meadow campus and its King’s Meadow campus, which it has owned since 2005 and is also being sold.

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“The surveyor valuations showed that the values on our balance sheet were higher than they should be and we chose to make the adjustment in year to reflect updated valuations,” . “This is an accounting impairment, meaning a paper adjustment rather than money physically leaving the organisation.”

Jane Norman, president and vice-chancellor of Nottingham, said Castle Meadow was purchased when the university planned to grow and expand its footprint in the city centre – before the financial position of the higher education sector became “extremely precarious”.

“The financial landscape for Nottingham and the wider university sector has changed dramatically in the last five years and we have needed to change our plans significantly due to this changing picture,” she added.

The university also said that its deficit included a bill for £11.3 million for compensation for loss of office payments to 581 members of staff.

This means that more than 1,000 staff have made been redundant in the past two years. The university’s 2023-24 accounts show severance payments worth £13.8 million to 408 people.

Nottingham’s accounts say increases in staff costs have been offset by reductions in other operating expenses, while additional cost control measures have been introduced, including a vacancy freeze and additional oversight of all spend greater than £20,000.

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Nick Clare, secretary of the Nottingham University and College Union (UCU) branch, said the accounts suggest that many of the financial problems the university has experienced were “self-inflicted”, undermining the idea that wider pressures are to blame.

“Concerningly some of those responsible for bad financial decisions like Castle Meadow campus are still in strategic positions at the university, and playing a crucial role in the ongoing restructure.

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“Once more staff, and by extension students, are being made to pay for poor financial decisions.”

Nottingham’s deficit means that seven of the 24 members of the Russell Group recorded a loss in 2024-25.

Elsewhere, Swansea University recorded an underlying operating deficit of £39.9 million, excluding pension adjustments.

Its tuition fee income decreased by £36.7 million, largely as a result of a drop in international student numbers.

“The continued changes to UK immigration policy have negatively impacted recruitment from overseas students this year and additional savings were made in year to mitigate the reduced income,” it said.

London South Bank University also reported a deficit before other gains and losses of £7.8 million, Aberystwyth University an operating deficit of £2.4 million, and Liverpool Hope University a deficit of £1 million.

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patrick.jack@timeshighereducation.com