Students could struggle to access high-quality education in the future under the current funding model for higher education, a university chief will warn.

Dame Sally Mapstone, the new president of Universities UK (UUK), will say universities need “increased public investment” to protect higher education.

In her inaugural speech as president of UUK, which represents 140 institutions, Dame Sally will suggest that British universities “incurred an annual £1 billion loss in teaching domestic students last year”.

She will warn: “This situation must not persist. It threatens the opportunity for future students to have access to properly resourced and high-quality higher education simply due to when they were born.

“And it threatens to diminish the UK’s ability to deliver world-leading research and innovation to drive our knowledge-intensive and globally competitive economy.”

The Government raised the cap on university tuition fees in England to £9,000 a year in 2012 and it has been fixed at £9,250 since 2017.

The UUK chief will warn that funding per student in England will be the lowest in nearly 25 years by 2025-26 and only worth £5,800 at 2011-12 prices.

Dame Sally, who is vice-chancellor of the University of St Andrews, will say that the funding situation in Scotland is “even more acute” and similar declines have been seen in Wales and Northern Ireland.

In a speech at the UUK’s conference in Manchester, Dame Sally will say: “It is manifest that the UK needs our universities to be engines of innovation and change. To do this though our universities need a sustainable funding model.”

Last month, universities minister Robert Halfon suggested that raising the cap on tuition fees in England during a cost-of-living crisis was not going to happen “in a million years”.

In her address to hundreds of university leaders on Thursday, Dame Sally will say: “To gain the increased investment we need, we must help earn it.”

She will add: “We cannot ask for increased public investment in the current context unless we have done everything we can to ensure our universities and the ways they operate are as efficient and innovative as possible.

“We must make absolutely sure that we are delivering value for money and high-quality education to our students.”

In her speech, the UUK chief will highlight a new London Economics report which suggests that universities had a positive economic impact of nearly £116 billion and supported more than 760,000 jobs in the UK in 2021/22.

The report, commissioned by the UUK, adds that the total economic impact from UK universities was more than £130 billion as international students generated an additional £14.8 billion.

Dame Sally will add that sharing stories of the transformative benefits of higher education “matters now more than ever given the counter-narrative that a university education isn’t worth it”.

Mr Halfon, minister for skills, apprenticeships and higher education, will make a speech at the UUK’s conference at the University of Manchester.

Education Secretary Gillian Keegan had originally been scheduled to appear at the conference, but she had to withdraw due to other priorities.

Shadow education secretary Bridget Phillipson and Professor Arif Ahmed, director for freedom of speech and academic freedom at the Office for Students (OfS), will both speak at the event.

A Department for Education spokesperson said: “To support our world-class higher education sector, we’re investing £10.7 billion in subsidised tuition fee loans in financial year 2022-23, £1.5 billion in Strategic Priorities Grant (SPG) funding this year, and £450 million in SPG capital funding over the three-year period from 2022/23 to 2024/5.

“This will support universities to provide the skills we need for the 21st century, through high-quality courses and investment in world-class facilities that lead to good jobs for students, supported by our taxpayer-backed student finance system.”