Coronavirus: UUK asks government for massive funds to support the sector

In return for government money, Universities UK said the sector will cut costs and restrict unconditional offers

Universities UK (UUK) has today written to the government asking for billions of pounds of investment to support the sector during the coronavirus crisis because some institutions are at risk of going bust.

In exchange for the government support, UUK said the sector is ready to restrict unconditional offers and cut costs.

The paper outlined a package of measures – including a student number cap and a doubling of quality-related research ­(QR) funding – to help shore up university coffers during what the sector expects to be a challenging year.

The request was delivered today (Friday 10 April) to chancellor Rishi Sunak, education secretary Gavin Williamson and business secretary Alok Sharma.

UUK estimates that the higher education sector will lose £790 million this year from accommodation, catering and conference income – and could lose up to £6.9 billion next year if the numbers of international students drops dramatically.

“Without proactive action from both institutions and support from government, Universities UK warns that some universities would likely face financial failure, with severe impacts on their students, staff, local community and regional economy,” the organisation warned. “Others would come close and be forced to reduce provision for students or to significantly scale back research activities and capacity.”

Moving forward [universities] will act collectively and responsibly to promote sector-wide financial stability
– Alistair Jarvis, Universities UK

On research, UUK have called for QR funding to increase by 100% for the 2020/21 academic year. Current levels of total QR funding stand at £1.98bn, meaning government could expect a bill of nearly £4bn under the plans outlined today.

On the other side of the dual-funding research system, the paper also requests that the full economic cost of research be funded through government grants. At the moment, the research councils of UK Research and Innovation (UKRI) typical fund 80% of a research project’s costs.

The paper also calls for an innovation fund to “rebalance the economy” and a transformation fund to support struggling universities in the next three years. It said this latter fund would help providers “reshape” or “merge together” in order to achieve long-term sustainability.

On domestic and EU students, UUK have called for a student number cap. Under the proposal, universities would be permitted to recruit as many undergraduates as they had forecast before the Covid-19 outbreak (plus 5% ). It suggests the Office for Students (OfS) could impose “significant sanctions” on any provider that breaches this cap without good reason.

According to UUK, this measure is necessary to stop universities over-recruiting domestic students to cover the predicted loss of international students.

The proposed cap will do nothing to stop Russell Group institutions hoovering up more students from the newer, post-92 universities
– Jo Grady, University and College Union

On international students, the UUK has asked government to delay the introduction of the new immigration system for EU students starting in the 2021/22 academic year, and hold fee and loan arrangements until September 2021.

In return for this support, UUK said universities would agree to restrict the number of unconditional offers they make in future and agree to “reduce costs and further increase efficiency” through job freezes and tighter spending controls.

Any package of support for higher education must include appropriate support for students, especially considering the mounting student discontent that courses are not being delivered as promised – Eva Crossan Jory, NUS

Read more: US universities will suffer most from coronavirus impact, says Moody’s

A full list of UUK’s other requests:

  • Confirm the Graduate Immigration Route as soon as possible
  • Targeted scholarships to lure international students and support in promoting the UK as a study destination to international students
  • More flexible visa system for students planning to start courses this autumn
  • Provide bridging loans to cash-strapped universities
  • Halt proposed cuts to teaching grants for 2020/21
  • Confirm universities are eligible for the Coronavirus Business Interruption Scheme and Job Retention Scheme
  • Increase institution-specific targeted allocation (ISTA) funding for small and specialist providers
  • New funds to support retention and progress for students from disadvantaged backgrounds
  • Support reskilling people through part-time provision and flexible adult learning
  • Protections for all STEM, teaching and healthcare degrees

The chief executive of Universities UK, Alistair Jarvis, said: “The package of measures we have proposed today will support universities across all four nations of the UK to ensure that they remain able to weather the very serious financial challenges posed by Covid-19.

“It will help to protect the student interest, to maintain research capacity, to prevent institutions failing and maintain the capacity to play a central role in the recovery of the economy and communities following the crisis.

“Universities have already made a huge contribution to the national effort to fight Covid-19 and moving forward will act collectively and responsibly to promote sector-wide financial stability in these challenging times and help the country to get back on its feet and people to rebuild their lives.”

What has been the reaction?

The general secretary of the University and College Union (UCU), Jo Grady, described UUK’s proposals as “piecemeal” and said they failed to “recognise the size of the problem”.

She added: “We need a fundamental shift in how universities operate if we are to protect our institutions, staff and students, and to ensure higher education can play its vital role in the recovery.

“Instead of talking up mergers or narrowing the curriculum, universities need to step back from the dog-eat-dog approach of recent times and come together properly in the wider interest. We fear these proposals risk leaving many universities vulnerable at a time when we need the whole sector to be firing on all cylinders.

“The proposed cap will do nothing to stop Russell Group institutions hoovering up more students from the newer, post-92 universities. To rein this in, the government must provide proper underpinning for whole sector and insist on more effective cooperation from universities.”

Ms Grady said UUK and the government should consult the union’s seven-point plan, which she published last week.

Dr Tim Bradshaw, chief executive of the Russell Group, said: “To secure long-term sustainability for students and for the UK’s vital research and innovation base, sector-wide financial support and stabilisation measures are needed.

“As we look to the future, it is vital the country is in a strong position to bounce back again after this crisis. More than ever, the UK will need the skills, research, innovation and expertise universities bring. We therefore support the full package of measures that have been developed with Universities UK on behalf of the whole sector. The right investment now will underpin the future growth and prosperity of the country.”

NUS vice-president (welfare) Eva Crossan Jory said students “will pay the price if we don’t act now”.

“Any package of support for higher education must include appropriate support for students, especially considering the mounting student discontent that courses are not being delivered as promised and demands for refunds,” Ms Crossan Jory said.

“We support calls for the UK government to step in and deliver a package of support to protect the tertiary education sector from the long-term impact of this pandemic – but this must involve supporting universities and colleges where they will need to consider refunding all or part of the fees they have charged.

“The government must also provide emergency funding for student hardship in England as the Scottish government has done in respect of Scotland.”

Related news: More than half of higher education providers report deficit – Hesa

Read more: Coronavirus: only 49% of students happy with online learning, says Hepi poll

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