English universities lobby for bailout after A-levels fiasco

Universities are lobbying the government to forget its punitive “restructuring regime” and offer a targeted bailout package to any English institutions pitched into financial crisis by the ministerial U-turn that lifted student number controls after the A-levels debacle.

Universities UK and MillionPlus, the association of modern universities, have both made the call via the task force convened by the universities minister, Michelle Donelan, after the government’s sudden changes of tack turned the A-levels fiasco into a university admissions crisis.

Those with knowledge of the talks reported that the Department for Education appeared receptive but said the Treasury had made no commitments thus far.

There are suggestions that a “significant minority” of institutions are expecting to lose hundreds of students each. They fear that students may be drawn away by higher-tariff institutions, given their ability to expand following the lifting of number controls and an increased number of applicants with higher grades in the wake of the government’s decision to accept teachers’ estimates of their students’ grades.

Sources said a range of institutions, not just post-92 universities, could be affected, potentially threatening the viability of some specialist courses without government support.

There are suggestions that some newer universities are also pushing for the government to abandon another previously outlined support package to assist research-intensive universities because those institutions will benefit financially from extra domestic recruitment following the A-levels U-turn.

Universities are also urging the government to provide a separate, one-off injection of capital funding to improve simulation training for the future public sector workforce, particularly the NHS, and to support Covid-proofing of campuses.

Granting a bailout package would be a change of course for a government whose ministers have recently been eager to attack universities, calling for an end to the era of higher education expansion and a rebalancing towards further education.

The Department for Education firmed up this agenda in its recently announced “restructuring regime” for universities seeking emergency funding in the wake of the Covid crisis, which would offer repayable loans in exchange for an extensive range of conditions – including institutions refocusing on courses deemed to have better graduate earnings returns.

In terms of a targeted bailout package, one suggested rough calculation of the funding that would be needed per institution would be to take the £9,250 tuition fee per student lost, and multiply that by three to take account of the fact that each student lost means lost income over the three years of a course.

Such a calculation would mean that a university that lost 200 students would receive a grant of £5.6 million. One source said that about £100 million would be needed for universities hit by the admissions crisis – a relatively small sum given the government aid handed to other sectors recently.

The call is for grants, rather than loans, because many institutions are already at maximum borrowing levels.

Andy Westwood, professor of government practice at the University of Manchester, said ministers who have attacked higher education expansion and criticised “low value” courses should remember two key aspects of the work done by lower-tariff universities when considering a support package.

“First, these universities were bailing out young people and ministers in that initial phase after exam results were published,” he said.

“Second, these are universities serving towns, cities and communities that need all the help they can get. This, of course, is the [government’s] ‘levelling up’ agenda and the need to find ways to revitalise communities, incomes and life chances in towns and cities particularly in the north and the Midlands.

“So, there are issues of both honour and political pragmatism here.”

john.morgan@timeshighereducation.com