Universities can be saved without bailouts, says Phillipson

Stabilising the finances of the English university sector will be a “day one” priority for a Labour government, according to the shadow education secretary, who said she does not believe bailing out institutions will be necessary but declined to rule it out.

Bridget Phillipson said the party was “determined to maintain the world-leading status of our universities” as she signalled a different approach to the current Conservative government that, she said, had “denigrated” the sector.

Asked by Laura Kuenssberg on her BBC Sunday morning show on 23 June whether Labour would use taxpayers’ money to bail out a university that might otherwise go under, Ms Phillipson said: “Universities are in crisis, and I am really concerned about that.

“The challenge that we have from opposition is that I know the government has been doing work in this area to understand the full extent of what is going on in the sector.

“We don’t have the same level of access to that. But I think we do have to tread with real care here because universities right across our country, in our towns and cities, are really important engines of growth and opportunity and jobs.

“I would want to avoid any disruption happening to young people’s education, where if an institution were to run into trouble that would be the outcome.”

Pressed again on whether state funding would be used to rescue universities “on the brink”, Ms Phillipson said: “I don’t believe that will be necessary. I think there are measures that can be taken to stabilise the sector. That will be a day one priority.”

She said the English regulator, the Office for Students, has been “looking at areas where we can strengthen the financial regulation and oversight of the sector” and will publish some recommendations on how to ensure institutions are put on a stronger financial footing.

Ms Phillipson has previously said that raising tuition fees after the election was “unpalatable” without ruling it out.

The party’s manifesto also signalled that it would hold a review of the entire tertiary education sector but this could potentially take several years and university leaders have been pushing it to put stop-gap measures in place, given the number of institutions facing large deficits.

Ms Phillipson refused to be drawn on what measures the party was considering but said universities should expect a different approach should the party win the 4 July election.

“What I can say very clearly is that we will make sure that once again universities are recognised as the engines for growth across our country: a public good, not a political battleground,” she said.

“We will not denigrate them in the way the Conservatives have done, and we will deliver a better system that is better for taxpayers, better for students and graduates and secures the long-term future of the sector.”

tom.williams@timeshighereducation.com