The government needs to establish a £2.5 billion fund to support universities at risk of closure, in order to protect students and mitigate against wider damage to the sector, a report has recommended.
The proposed Higher Education Enhancement and Transformation Scheme (HEETS) would offer repayable state-backed loans to higher education (HE) institutions in financial trouble if they can make a compelling case that they can deliver sustainable and high-quality provision.
In order to qualify for HEETS support, institutions would have to meet six conditions, which focus heavily on the university’s regional impact—such as demonstrating their plans for economic growth in the region—as well as what the impact will be on public service training.
‘Contagion Risk’ in the Sector
The report highlighted the “risk of contagion” the sector faces if a university closes down “in a disorderly way.”A disorderly closing of one university may prompt lenders to “look more cautiously at lending to other institutions,” as well as effect confidence in the sector of current and prospective students.
“All of these ripple effects have the potential to cause seismic difficulties in other institutions unaffected directly by the exit of another institution,” the report says.
However, authors stated that they are not calling for an increase in tuition fees—though they say a small increase may be required to stabilise some institutions—or for the status quo in the HE landscape to be maintained.
“This is not an argument for preserving the current system in aspic—or saying that the higher education system must always grow. It’s an argument that government, policymakers and indeed all citizens benefit from a financially sustainable HE system that delivers both individual benefit, and wider national goals for the country,” authors said.
Rather, changes “need to be managed in a strategic way, and the systemic impact constantly monitored.”
A DfE spokesperson said in response to the recommendations: “We are committed to creating a secure future for our world-leading universities so these engines of growth can deliver for students, taxpayers, workers and the economy.
Financial Problems
The report comes as the HE sector faces increasing financial issues, with many across the country shutting courses and making staff redundant.Last week, the University and Colleges Union called on the government to issue emergency rescue packages to universities struggling with their finances.
Responding, Education Secretary Bridget Phillipson said universities are autonomous and are expected to manage their own budgets, “and I would expect them to do that without seeking any calls on the taxpayer.”
Reordering Post-18 Education
The Public First recommendations come after education think tank EDSK released a report on Wednesday calling for tuition fees to be lowered to £6,000 and for post-18 education streams to be overseen by one body, giving equal footing to university degrees and other forms of adult education, both vocational and academic.EDSK Director Tom Richmond told The Epoch Times that the current HE education system is “heavily skewed towards three-year residential full-time undergraduate degrees, which is a hugely expensive and inflexible way of upskilling and reskilling both young people and adults.”
“It would be far cheaper for government and far better for learners if more flexible pathways were available to achieving the same goal of a more skilled workforce. This would mean rethinking how, when and where government invests in every part of tertiary education,” he added.
The EDSK also proposes that tertiary institutions are funded based on how much they contribute to local and regional economic prosperity, saying this could include helping to deliver qualifications in core skills like literacy and numeracy or specialist degree-level training.
“This approach will hopefully make all universities think harder about how much of a contribution they are making to their local economy and local communities,” Mr. Richmond said.
