31 January 2017

Since the early 2000s, universities have been classified all together to the non-profit institutions serving households (S.15) sector in the UK National Accounts. This classification predates the substantial rise in tuition fees from 2012 and other changes in funding arrangements. It also predates the adoption of the European System of Accounts 2010 (ESA 2010) statistical framework in 2014.

In order to address these changes, the Office for National Statistics (ONS) is undertaking a classification review of universities in the UK. The review will be conducted in accordance with ESA 2010 guidance, to ensure compliance with the new rules on assessing whether institutional units (that is, universities) are “market” or “non-market” producers. Further information on this can be found in section 3.1.2 of the classification process page on the ONS website.

The outcome of the review will be that an individual university will either be deemed to be in the private non-financial corporations (S.11002) sector, or will remain classified as a non-profit institution serving households (S.15).

ONS regularly reviews legislation and guidance relating to a number of institutions, including universities, to determine whether any changes would have a potential impact on private sector classification and will continue to do so. ONS is not currently aware of any legislative (or similar) changes that would put in doubt the private sector classification of universities at this time and therefore public sector control will not be assessed as part of this review. This means that at the end of the review universities will remain classified to the private sector.

The review is expected to be completed within 12 months and classification decisions will be published as each university’s review is completed. Further information can be obtained by contacting econstats.classifications@ons.gov.uk.