Universities in England facing severe financial difficulties should not expect a government bailout, the education secretary has said, despite warnings from the sector of thousands of job losses, course closures and even bankruptcies.
With 40% of institutions projected to run budget deficits this year, Bridget Phillipson acknowledged the crisis. She said she was “determined to develop a brighter future for universities” and put them on a “sustainable footing in the long term”.
Asked if the government would act as a lender of last resort, however, she said it was up to institutions to manage their finances. “Universities are autonomous and there are expectations around how they manage their budgets and I would expect them to do that without seeking any calls on the taxpayer,” she said.
According to Universities UK, which represents 142 institutions, about 70 universities are actively engaged in cost-saving programmes, including cuts to jobs and courses.
Among those affected are Goldsmiths, University of London, with 97 redundancies, and the universities of Lincoln, Huddersfield and Central Lancashire, but UUK says it expects “nearly all” universities will be forced to make savings by the end of the year.
Interviewed on BBC Radio 4’s Today programme on Monday, Phillipson would not be drawn on any potential increase to domestic tuition fees, which have remained almost unchanged since they were increased to £9,000 in 2012, rising to £9,250 in 2017, and said there were “no plans” on finances at this stage.
She did offer some comfort to the sector, with a staunch defence of international students and, after years of uncertainty under the last government, the education secretary said she would ensure the graduate visa route was maintained “so that students can come here and study with certainty and with confidence”.
The significantly higher fees that overseas students pay have helped increase university finances and supplement home fees, which are capped and have diminished in value in the face of rising inflation. However, recent measures introduced by the Conservatives to reduce immigration have resulted in a sharp drop-off in international student numbers in recent months.
There are also expected to be announcements in parliament this week about reforms to regulation, as conducted by the Office for Students, which the government believes will help shore up the sector. Phillipson will announce a new OfS chair to take over from James Wharton, who resigned this month.
“We recognise that universities are a public good,” Phillipson said. “The initial steps that we will be setting out later this week are around regulation. We need to see a sharper focus on the regulation of our sector to make sure that universities are on a firm footing.”
UUK would like to see the government ease the regulatory burden on universities as a way of freeing up money for vice-chancellors to spend on teaching students.
Vivienne Stern, UUK’s chief executive, welcomed Phillipson’s reassurances on international students but said she would be concerned if the government was closing down options at this stage. “I think we need to find a solution to this problem otherwise things will just get worse,” she said.
