Universities: Coronavirus

(asked on 5th May 2020) - View Source

Question to the Department for Education:

To ask Her Majesty's Government what plans they have to act to ensure that no UK university will become (1) insolvent, and (2) unable to operate, as a result of restrictions in place to address the COVID-19 pandemic; and if not, why not.

Answered by
Baroness Berridge Portrait
Baroness Berridge
This question was answered on 14th May 2020

The government recognises that the COVID-19 pandemic is bringing very significant financial challenges to the higher education (HE) sector and we have been working closely with the sector to monitor the likely impacts.

On 4 May 2020, my right hon. Friend, the Secretary of State for Education, announced a package of measures to ensure sustainability in HE at a time of unprecedented uncertainty.

We will stabilise the admissions system and reprofile tuition fee payments, expected to be worth £2.6 billion, for providers so that they receive more cash in the first term of the 2020/21 academic year. This will have no impact on students but will allow providers to better manage financial risks over the autumn. This will be available to all providers across the UK. In reprofiling these payments, we are clear in our expectation that providers should use the cashflow benefits appropriately, taking significant steps to improve efficiencies and manage their finances in order to avoid cashflow problems in the future. Reprofiling in this way is a one-off intervention for the autumn term only, to help providers take all necessary steps now to prepare for the future.

In England, we will also be bringing forward £100 million of quality-related research funding for providers to the current academic year to help to address some of the immediate pressures faced by university research activities.

We are reminding providers, as part of existing programmes and using established procedures, that the department will consider purchasing land and buildings where they can be used for new or expanding schools and colleges in England. This financial year (across purchases from all suitable vendors, including but not limited to HE providers), we have budgeted up to £100 million to acquire sites for planned projects in England. Details are available on GOV.UK at: https://www.gov.uk/government/news/government-support-package-for-universities-and-students.

We expect that access to the business support schemes, reprofiling of public funding and student number controls should be sufficient to help stabilise most providers’ finances and that this should be the first port of call for providers.

Should that not be sufficient, such that a HE provider finds themselves at risk of closure, we will only intervene further where we believe there is a case to do so and only where we believe intervention is possible and appropriate and as a last resort.

In such instances, we will work with providers to review their circumstances and assess the need for structured transformation solutions and any attached conditions. The department will be working with HM Treasury and other government departments to develop this restructuring regime, as well as with the devolved administrations, to ensure that it aligns with their respective approaches.

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