Call for support after warning universities may face further financial crisis in autumn

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Ministers are urged to help universities in England in the wake of a warning that institutions face a “tipping point” in their financial struggles this autumn.

It is claimed the future of certain universities hangs in the balance ahead of A-level results day next Thursday – with finances dependent on how many students opt to enrol with them.

Leaders in the sector told The Guardian that financial instability could mean certain departments are culled and institutions are pushed into joining forces.

Vice chancellor of the University of East Anglia, David Maguire, told the publication “an awful lot of institutions are placing extremely large bets on this recruitment round”.

He added: “Quite frankly I don’t think there are enough students to go around.”

Mr Maguire said universities are being forced to “aggressively” recruit more undergraduates from the UK through the clearing process, due to international student recruitment dramatically decreasing.

“I think the tipping point will follow clearing – it’s usually 1 October before the dust has settled and people know how many students they are going to get,” he added.

“I think some [governing] councils will be calling in the books, as it were, and assessing the financial viability of their organisations. So I’m very worried about the months of October, November and December.”

He called for the government to support universities before their finances further deteriorate.

“The government is misguided here and they should recognise the severity of the situation. They really ought to be encouraging universities to look for opportunities for merger, for reassessing their provision, and doing this in an organised and controlled fashion,” Mr Maguire added.

A different vice chancellor, who wanted to remain anonymous, warned many universities would have to “cut hard and stumble through” their struggles.

Last month, education secretary Bridget Phillipson announced universities in England grappling with financial problems should not bank on being bailed out by the government.

The UK’s University and College Union (UCU) has released a list of 66 universities in financial distress this year – with this sizeable chunk constituting over a third of all universities in the UK.

Many of these institutions are already being forced to dismiss staff and cut courses altogether – with the humanities and creative arts hit hardest.

UCU’s general secretary Jo Grady, in a letter she recently wrote to Ms Phillipson and skills minister Jacqui Smith, said: “Anything short of an emergency rescue package for the sector will be insufficient to stave off catastrophe.

“This funding package should, though, come with conditions such as ensuring jobs are protected. We think there are three universities we have been able to identify that could be close to financial collapse and would benefit from state intervention and support.

“If they do not get state support they will struggle still and use cuts to staff as shock absorbers. We see this as a systemic crisis. We don’t think parents and prospective students understand the total mess some of our universities are in.”

It comes after Professor Alan Smithers, director of the Centre for Education and Employment Research at the University of Buckingham, suggested around 16,000 fewer top A-level grades could be awarded this summer as part of ongoing aims to get back to pre-pandemic grading.

But exams regulator Ofqual thinks this year’s A-level results in England will be “broadly similar” to last summer, when grades were brought back to what they were before Covid hit.

The pandemic triggered a rise in top GCSE grades in 2020 and 2021 due to the performance being hinged on teacher assessments rather than examinations.

A spokesperson for the Department of Education said: “The government is acting to establish certainty and sustainability for the higher education sector, securing our universities as engines of growth, excellence and opportunity.

“That is why we are refocusing the role for the Office for Students, concentrating on key areas including monitoring financial sustainability. We are committed to creating a secure future for our world-leading universities so they can deliver for students, taxpayers, workers and the economy – and play their part in breaking down the barriers to opportunity.”