Report Calls for £2.5 Billion Fund to Save Universities Facing Closure
Authors emphasized that they are not advocating for the maintenance of the current status quo in the higher education (HE) landscape. Instead, they are calling for changes to be implemented in a way that avoids causing widespread disruption.
A recommendation in a recent report suggests that the government should create a £2.5 billion fund to aid universities that are at risk of closure. This fund, known as the Higher Education Enhancement and Transformation Scheme (HEETS), would provide repayable state-backed loans to struggling HE institutions, given that they can present a compelling case for delivering sustainable and high-quality education.
To be eligible for support under HEETS, institutions must satisfy six conditions, with a significant focus on the university’s regional impact and its plans for economic growth in the area, as well as the effects on public service training.
According to the report by consultancy Public First and the University of Warwick, there is a pressing need for a more proactive approach towards managing risks associated with institutional failure, as the current HE policy landscape is ill-equipped to handle such situations.
‘Contagion Risk’ in the Sector
The report points out the potential “risk of contagion” within the sector if a university closes down in a disorderly manner, which could have ripple effects on other institutions, impacting lenders and students’ confidence in the sector.
The authors clarified that their intention is not to advocate for an increase in tuition fees or to maintain the current HE landscape as it is. They stress the importance of managing changes strategically and monitoring their systemic impact continuously.
A spokesperson from the Department for Education (DfE) responded to the recommendations by emphasizing the government’s commitment to ensuring a sustainable future for universities and protecting students, taxpayers, and the economy.
Financial Problems
The report comes at a time when the HE sector is grappling with growing financial challenges, leading to course closures and layoffs in many institutions.
Last week, the University and Colleges Union urged the government to provide emergency assistance to financially struggling universities.
Reordering Post-18 Education
The report’s recommendations follow a proposal from the education think tank EDSK calling for a reduction in tuition fees and a unified oversight of post-18 education streams to enhance equal access to different forms of adult education.
EDSK Director Tom Richmond emphasized the necessity of offering more flexible pathways for upskilling and reskilling individuals, which could be more cost-effective and beneficial for learners.
The EDSK also suggests funding tertiary institutions based on their contributions to local economic prosperity, aiming to prompt universities to enhance their impact on the community.
PA Media contributed to this report.
