Conditions for debt bailouts: ‘The most politicised state intervention into universities the UK has ever seen’

As universities face massive income loss, the government leverage debt which impairs autonomy over curriculums and governance, recent parliamentary reports have shown.

The Parliament Petitions Committee recently published recommendations for how the Government should support universities in responding to Covid-19 and UCU strikes. The compilation of research from students, unions, and the Minister for Universities – Michelle Donelan MP – spoke of the government’s “responsibility” to provide a “wide-ranging package of support” for universities, just as they have done for businesses.

However, the government has responded to these recommendations with a “limited bailout package”, according to the convenor of the Convention for Higher Education, Sean Wallis. The “repayable loan” will be offered to universities on the condition that they sacrifice autonomy over their curriculums and governance. Wallis described this policy as “the most politicised state intervention into universities the UK has ever seen.”

Curriculums

The Department for Education (DfE) report outlines government intentions to sway universities their COVID-19 related debt to “tackle ‘low-quality courses’” in favour of “subjects which deliver strong graduate employment outcomes in areas of economic and societal importance, such as STEM, nursing and teaching.”

They add that providers will need to “enhance their regional focus” by considering “technical education or apprenticeships” over their prior curriculums.

They do not, however, define what a ‘low-quality course’ is.

University of Nottingham sociologist, John Holmwood, expressed worries that the arts would be determined as having lesser “economic and societal importance”, saying that the public has been “crying out” for them during the UK lockdown.

Oxford Economics (OE) report that Creative Industries contributed £111.7bn to the UK economy in 2018 and was growing at five times the rate of the UK economy as a whole prior to COVID-19 (7.4% vs 1.4%).

It employed 2.10 million people in 2019, growing 34.5% from 2011 and three times the rate of UK employment overall (11.4%). In their no-COVID predictions, OE expected the sector to continue growing and benefitting the UK economy.

Free speech and academic freedom

The report warns that students’ unions’ budgets for “niche activism and campaigns” may be defunded, where in the same document they say that “all universities must… demonstrate their commitment to academic freedom and free speech.”

King’s recent collaboration with York, QMU, and Southampton to design online learning platforms that accommodate China’s internet restrictions are an example of the government’s apparent concern with “censorship.”

Analysis of King’s Financial Statements and HESA data reveal that Chinese students alone comprise a significant portion (4.4%) of King’s funding. This raises concerns that the government’s policy could present international universities with a dilemma; capitulate to transnational pressures and sacrifice governmental loans, or don’t and risk sacrificing more secure income from overseas tuition.

The context

200,000 fewer first-year students are expected to enrol at all UK universities this autumn, which could cost the Higher Education sector £2.5 billion (according to London Economics.) With this, increased outgoings from tuition fee refunds, and other factors, the Institute of Fiscal Studies (IFS) has warned that, on median projections, 13 universities may go bankrupt in the autumn term.

They predict that a bailout of £3.2 billion, as proposed by Universities UK “would cover only a fraction of the losses” in a median best-to-worst case scenario.

The IFS report categorises universities into quartiles based on their 2020 Complete University Guide (CUG) Ranking. King’s is classed as a quartile 1 (Q1) university, meaning it sits at joint 20th position with the University of Nottingham.

Q1 universities are predicted to lose the most funding, over £7000 per student on average, because of their “high numbers of international students and significant pension obligations.” However, because they are also the most profitable universities, IFS does not expect them to experience an “overall deterioration in their financial position over the next few years.”

It is quartile 3-4 universities at 60th position and below that the IFS deem most at risk, which mainly comprises of new universities, ex-polytechnics, and art colleges.