The Treasury will guarantee the University of Northampton’s £230 million bond to fund its new campus – but union members have passed a motion of no confidence in the vice-chancellor over the “risky” plans.
It was announced last week that the Treasury had given its guarantee to a public bond to be issued by the university to fund its Waterside campus, scheduled to open in 2018.
The Treasury has never before guaranteed a university bond, potentially opening the door for other universities seeking a way to reduce their costs of borrowing to fund building projects. Northampton, with an annual income of about £100 million, is to take on a £232 million bond. It will benefit from an additional £60 million via the Public Works Loan Board.
Bob Rabone, chair of the British Universities Finance Directors Group, noted the ratio between Northampton’s income and bond debt, saying: “I haven’t seen any institution borrow quite so much money.” He added that without the Treasury guarantee, “one would not expect this level of borrowing to be possible”.
A statement from the University and College Union branch’s executive said that a motion of no confidence “in the vice-chancellor [Nick Petford] and three other members of senior management” had been “unanimously passed” on 5 November “over the proposed move to the new ‘Waterside campus’”.
The motion was passed at a branch meeting and has now gone to an electronic ballot of all members at the university. The UCU branch statement argues that the borrowing is based on the assumption that the university’s income from students will remain at least at present levels in future.
It adds: “Members of the branch are concerned that the university is incurring significant debt based on risky assumptions about future student numbers and fee levels as well as the value of the current land [the university will be leaving its existing campuses].”
The statement also criticises the plans for the Waterside campus for supposedly being based on a “blended learning” model. “It is risky to commit to a model of university education with no lecture theatres and limited teaching and staff working spaces, premised on the belief that blended and online learning are sustainable models of higher education,” the UCU branch says.
A Northampton spokesman said: “The Waterside campus will be a positive development for students, staff and the wider community. The statement by UCU is inaccurate and refuted totally.”