Help students more to win £2 billion bailout, says ex-HE minister

Treasury’s opposition to Universities UK’s rescue package could be overcome if institutions offer extra assistance to graduates, Lord Willetts tells THE event

April 24, 2020
David Willetts

Universities stand a better chance of securing a £2 billion rescue package if they focus on what more they will be doing to help newly qualified graduates in a coronavirus recession, rather than stressing their own financial difficulties, former universities minister Lord Willetts has advised.

With the Treasury reportedly resistant to calls from Universities UK (UUK) for a one-off sector bailout, despite warnings that some institutions might collapse without government support, Lord Willetts said a different approach was required to “unblock” the impasse.

Speaking in an online debate with former higher education ministers Jo Johnson and Chris Skidmore on 23 April, Lord Willetts said “one way…to get more sympathy from the Treasury is to look at it from the point of view of young people and students”.

“The job market in the UK and other advanced Western economies is going to be disastrous this summer – if you are a school- or college-leaver, it will be terrible,” explained Lord Willetts, who predicted that student numbers would rise as many graduates with a disrupted final year might want to do a master’s degree.

“Universities, in partnership with further education colleges, should pitch that they can do more in a time of crisis and need extra resources to do it,” argued Lord Willetts, who advised a “pitch in terms of [students’] interests, not simply as universities as institutions”. He proposed that universities offer a six-month course to those about to graduate, which included internships with local businesses.

“I would hope the government does provide some financial help, but the Treasury is playing hardball – they will be asking telling questions about what this money is for, why institutions need it and what, in turn, universities will do to raise their game,” said Lord Willetts.

Treasury officials might also be persuaded to advance a bailout if universities could demonstrate their role in creating “smart partnerships” with industry to leverage private research and development spending, said Lord Willetts, noting that increasing this investment will be crucial in helping the government reach its goal of spending 2.4 per cent of gross domestic product on research by 2027.

“I suspect at the end of this year, as part of a terrible economic picture, we will be seeing low levels of business investment and R&D,” Lord Willetts said.

He continued: “If universities and other publicly funded agencies are smart and show how, with public funding for R&D, they can bring alongside and boost private spending – that is an argument that will particularly strike home with the Treasury.”

Mr Skidmore agreed that universities should receive financial support, but he was concerned that the UUK plan “reverted back to a golden triangle narrative” that sought to ensure that older universities “disproportionately benefit from that package”.

“I would hope the government is taking time to work out an equitable mechanism by which universities can stay open, because the consequences, as the London Economics report has shown, is potentially a £6 billion loss to the economy,” said Mr Skidmore.

He also raised concerns that Russell Group universities might “suck up places and destabilise other places that are the ones training nurses who are fighting coronavirus”.

“Those are also the institutions with large numbers of vocational courses and those are predominantly the institutions when it comes to [promoting] social mobility,” he added.

Mr Johnson also argued in favour of a bailout, although he noted that “no sector should be frozen in aspic for eternity – sectors must be ready to adjust with changing circumstances”.

As the coronavirus crisis was, however, a “unique exogenous shock to the system”, said Mr Johnson, “it is right that we put our concerns about [how] market forces operate to one side and help the sector adjust to what is a unique set of circumstances…to prevent the disorderly collapse of institutions that are of extraordinary importance to the country”.

jack.grove@timeshighereducation.com


Watch the full debate

POSTSCRIPT:

Print headline: Promise more support for graduates and industry to help secure £2 billion bailout, says Lord Willetts

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Reader's comments (1)

The HE sector must be aware that governments also have to attend to other sectors of the economy which had become an increasingly onerous task even before Covid. What criteria should any government use to determine what proportion of an already reduced revenue should go to which sector. Should the government give more to the least of our brothers (as our Lord suggested) to those suffering the most? If some Vice Chancellors were in government instead, on what basis would they allocate funds in the current context with other sectors needing more attention? HEIs now need to be innovative and like other groups/sectors show how you can really contribute to the UK economy before asking for governments contribution. If half of a university's student body does not and cannot return, would that university cut it's senior administrative staff by half because in such a scenario that university would certainly be too heavy? Are all senior administrative staff, faculty heads and above, willing to take a 25% salary cut that goes into a university fund until a vaccine is found for the virus? What about cutting the cost of all bachelors, masters and doctoral programs by 50% for the next six months? What about collaborating with a private sector partner to develop a proposal to resolve a societal problem like poverty, unemployment, crime, inflation or any other? The sector has to take the advice we always give to our students to always expect changes, to be proactive, do not wait for others to put some treasure on your lap, nothing comes without sacrifice. This is the reality for all sectors despite what we think or choose to believe. Every crisis must be treated like an opportunity.

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