9 international students, continued falls in the real value of home tuition fees, and continued challenges to operating costs in terms of pay, pensions, energy, and estates management. These themes are considered in detail in Section 2. Notably, the three most significant increases in average inherent risk scores across our sample relate to partnerships, IT and digital estates, and UK government policy. While we examine some of the HE specific aspects of these risks in section 2.8, these areas mirror significant strategic risks identified by a broad spectrum of businesses. We evaluate these trends further in our European Risk Analysis Report. Figure 2 below shows the difference in average scores between inherent and residual risks, giving an indication of how confident institutions feel in mitigating key risks. The larger the number, the more confident institutions are in managing that risk. As in 2024/25, the analysis indicates that institutions continue to have a high level of confidence in their ability to managing risks which relate to legal and regulatory compliance and cybersecurity. Additionally, this year we looked at the range of inherent and residual scores within each risk theme to determine whether patterns of risk scores and confidence in risk control were similar or dissimilar across different institutions or types of institutions. This suggests that the greatest variations in inherent risk scores occur in areas where a) inherent risk is highest, and b) where there is likely to be significant variability based on mission, size, and location, i.e. in the areas of cybersecurity, financial sustainability, student recruitment, and estates infrastructure. However, we did not detect any consistent patterns based on mission, size or geography. The greatest variations in residual risk scores also occur in higher risk areas, namely cybersecurity, student recruitment and estates infrastructure. As noted above, the frequency with which risks appear in institutional risk registers informs the volume of risks analysed and the reliance which can be placed on the findings. Figure 3 below shows how often a risk theme appears as a distinct area on risk registers. Building on the upward trend observed over the last three years, financial sustainability, student recruitment and cybersecurity now feature on almost all corporate or strategic risk registers, alongside staffing and legal and regulatory compliance risks. Figure 2
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