UUK seeks billions in recovery funding for universities

Universities UK (UUK) has called on the government to provide billions of pounds of extra funding to enable the higher education sector to weather the battering universities have taken from the coronavirus pandemic.

Up to £7 billion (US$8.7 billion) of universities’ income in the next academic year (2020-21) from tuition fees from international students has been put at risk by the potential impact of the coronavirus crisis on international student recruitment, and universities are facing £800 million losses this year (2019-20) from other activities shelved or required as a result of the crisis.

On 10 April UUK proposed a body of measures to government outlining the actions needed to ensure that universities can survive the serious financial challenges posed by COVID-19.

This included a call to double the current £2 billion funding for quality-related research to £4 billion for 2020-21 “to maintain the UK’s research excellence, capacity and training of PhD students and to support the pipeline into research from postgraduate taught courses”.

‘Central role’ in national recovery

UUK said: “The government and the higher education sector must jointly take action to ensure universities are able to play a central role in the recovery of the economy and communities following the COVID-19 pandemic, as universities are central to developing skills, knowledge and research, and driving regeneration, social mobility and innovation.”

Without proactive action from universities and support from government, UUK warns, some universities would likely face financial failure, with severe impacts on their students, staff, local community and regional economy. Others would be forced to reduce provision for students or to significantly scale back research activities and capacity.

Many of those institutions most affected have higher levels of external borrowing, lower levels of cash reserves, and higher proportions of BAME [Black, Asian and minority ethnic] students,” says the paper from UUK proposing the measures. It was sent to the chancellor, secretaries of state for education and business, and to the ministers for universities and science, and research and innovation.

It highlights the significant risk that the impact and capacity of higher education could be severely damaged without mitigations and support.

There are both short- and long-term impacts currently facing universities, UUK says:

• In the current financial year (2019-20) the sector is facing losses in the region of £790 million from accommodation, catering and conference income as well as additional spend to support students learning online.

• In the next financial year (2020-21) the potential impact is extreme, with universities projecting a significant fall in international students and a potential rise in undergraduate home student deferrals.

• UUK modelling shows that the risks to fee income from international (non-EU and EU) students total £6.9 billion across the UK higher education sector.

The paper proposes a package that includes measures to reshape and refocus some institutions to promote longer term sustainability and to better meet skills needs; measures to reduce market volatility in undergraduate admissions for the 2020-21 year; and the creation of new rules to restrict destabilising behaviours such as the use of unconditional offers.

The proposals include:

• Protecting the strength, capacity and quality of the UK’s research base by increasing quality-related funding by 100% for 2020-21; providing the full economic cost of research funded through government grants; and increasing funding for innovation.

• A one-year stability measure for student admissions, allowing institutions in England and Wales in 2020-21 to recruit UK and EU-domiciled undergraduate students up to the sum of the 2020-21 total forecast for UK and EU-domiciled full-time undergraduate students (plus 5% of the intake) and an end to the “use of unconditional offers at volume”.

• Targeted support to protect courses that fulfil the need for key public sector workers and targeted support for reskilling through growth in part-time adult learning and shorter credit-bearing courses.

• The creation of a fund to enable universities to reshape and consolidate through federations, partnerships and potentially mergers.

• Giving universities access to coronavirus crisis related business funding and financing and an end to planned cuts in teaching grants.

• More flexibilities in the visa system to support international students planning to start courses in the autumn and flexibilities in English language and other requirements for visa applications, where these cannot be provided due to the closure of testing centres or disruption to examinations.

• Measures to stabilise demand from EU students by delaying introduction of the new immigration system for EU students starting studies in 2021.

Alistair Jarvis, chief executive of Universities UK, 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.

“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.”

Reducing costs

UUK’s paper also provides a commitment to universities doing everything they can to reduce costs and further increase efficiency through strong actions such as recruitment freezes and new tighter controls on spending.

Supporting the package of measures proposed to enable universities to play a critical role in rebuilding the nation, Dr Tim Bradshaw, chief executive of the Russell Group, said: “The whole higher education sector – like almost all others in the UK – is at risk in these unprecedented times. The financial situation for universities is complex, with everything from international student flows to charity and collaborative research income disrupted by the COVID-19 crisis.

“There are no simple solutions and while our universities play their part in responding to the immediate crisis through research, testing and practical support for the NHS [National Health Service], they are also taking steps to make savings and deliver the best value for every pound they spend. However, 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 has 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,” Bradshaw said.