Sussex economist Peter Dolton wrote an interesting article in VoxEU:
The problem is that between 2012 and 2015, most of the British universities have undergone a deep demographic change. Before 2012, the foreign students were dominated by the EU. However, the number of the Chinese students (and some other exotic ones) was steadily rising, especially after 2015, and now the Chinese (whose number at the British universities has tripled in a decade) heavily beat the Europeans.
The structure of the funding for the universities has changed dramatically in the recent decade, too. You may say that the universities' increasing dependence on exotic students' tuition explains much of their support for multiculturalism – it is good for them financially.
If my understanding is correct, the orange and blue pieces indicate income from the public budgets – which was assigned to research and teaching, respectively. However, the percentage of the income from the tuition was dramatically increasing after 2011, from some 30% to 75%.
The dark but realistic scenario for all these universities is that 75% of the foreign students won't arrive, along with 20% of the Britons. Without some extra income (e.g. new government help), the typical university would go bust. I actually think that this could be a very healthy thing. Universities have become self-serving indoctrination centers conquered by dishonest and low-quality humans with a severely dropping quality of the education and standards in general. Their overall contribution to the society is almost certainly negative by now.
I think that the British government shouldn't be saving such universities if they are in trouble. If it materializes, the disappearance of mediocre and lousy universities could be considered a silver lining of the insane Covid-19 hysteria and an unexpected cure to the out-of-control inflation of degrees and similar pathologies that were getting really bad in recent years.