‘No university should be allowed to go bust,’ says Labour shadow minister

Emma Hardy calls on government to underwrite HE funding during ‘unprecedented set of challenges’ posed by Covid-19

April 23, 2020

The UK government must guarantee that no university goes bust as a result of the coronavirus, Labour’s shadow minister for higher education has said.

In a letter to universities minister Michelle Donelan, Emma Hardy called on the government to underwrite higher education funding and prevent institutions from going bankrupt following an “unprecedented set of challenges”, arguing that institutional closures or massive cuts could cause harm to students, social mobility and the country’s chances of economic recovery.

“Our universities are not just businesses and should not be treated as such,” says Ms Hardy, who added that “Labour is calling on the government to guarantee that no university will be allowed to go bankrupt”.

The letter’s publication follows a report in the Financial Times that the Treasury is resisting calls from Universities UK for a £2 billion rescue package to help higher education institutions during the coronavirus crisis.

A report by London Economics for the University and College Union, published on 23 April, says that UK universities are facing a £2.6 billion shortfall in the next academic year, which could result in 30,000 job losses in higher education and another 30,000 in local communities.

In her letter, Ms Hardy said that “universities will play a vital role in the recovery and future prosperity of our country” and it was “essential, therefore, that no institutions are allowed to fall”.

“Allowing any higher education institution to fall hinders the ability of our economy to bounce back from this crisis and denies UK citizens the equality of opportunity that should be a given right,” said Ms Hardy.

“My greatest concern is that a failure to provide timely and comprehensive support to our universities in the face of this crisis will create ‘cold spots’ in the country for access to higher education to those who benefit from it the most,” added Ms Hardy, saying that “students from disadvantaged backgrounds, and part-time and mature students….will suffer disproportionately if regional HE institutions close.”

Warning that the loss of international students following the Covid-19 crisis would cause a “huge reduction in income which could have catastrophic effects on [universities’] ability to operate”, Ms Hardy said that a “joined-up approach in promoting our UK universities” abroad would be needed, as would “increased clarity from the Home Office about student visas”.

Ms Hardy also asked the universities minister to provide additional support for students, particularly those “who relied on part-time work that can no longer support themselves” following the Covid-19 shutdown. She also raised concerns about an “increased dropout rate when the semester starts again and further decline in the number of students from lower economic social groups attending university because of the cancellation of face-to-face widening participation events and visits”.

“Universities bring significant benefits to their local communities,” said Ms Hardy, noting their “central role in supporting local economies, employ large numbers of staff and contribute enormously through volunteering, cultural events and community activities”.

“If these institutions were to disappear, the damaging consequences would extend beyond the classroom and impact locally and nationally,” said Ms Hardy.

jack.grove@timeshighereducation.com

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Reader's comments (1)

Universities are now not the temple of education but the corporatized multibillion dollar enterprises replete with fraud advertising and fake reputation and ranking based on who can buy the better ranking. In this context, universities have set themselves up to fail by lowering admittance criteria and lowering pass marks and that does not help churn out millions of graduates who would otherwise not qualify and who will now ply their trade with non-existent skills. Universities must be allowed and forced to fail.

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