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Universities are facing a £500m 'black hole' in their finances.
As this crisis continues we will need to look at the medium term impacts not just the immediate crisis.
This is a useful article examining the massive impact faced by HE. https://www.thetimes.co.uk/article/coronavirus-universities-facing-a-500m-shortfall-as-pandemic-costs-mount-mh6qsbhch
As this crisis continues we will need to look at the medium term impacts not just the immediate crisis.
This is a useful article examining the massive impact faced by HE. https://www.thetimes.co.uk/article/coronavirus-universities-facing-a-500m-shortfall-as-pandemic-costs-mount-mh6qsbhch
2: To understand the potential scale of this for universities look at this graphic from Audit Scotland.
Total fee income from students coming from outside Scotland is worth £1bn.
If travel restrictions are still in place the impact could be much higher than £500m
Total fee income from students coming from outside Scotland is worth £1bn.
If travel restrictions are still in place the impact could be much higher than £500m
3: Also look at the 'Other Income' figure. This is worth another £570m.
This will be income from hiring out conference space, halls of residences let in the summer for hotel accommodation.
Again - it is not difficult to imagine that this figure could easily be down by ~50%
This will be income from hiring out conference space, halls of residences let in the summer for hotel accommodation.
Again - it is not difficult to imagine that this figure could easily be down by ~50%
4: The cross subsidisation of undergraduate teaching and research from international students and other income streams.
Students are funded at about 10% below cost.
This crisis is going to expose that in a very blunt way.
Students are funded at about 10% below cost.
This crisis is going to expose that in a very blunt way.
5: Debt levels are also a key issue in the sector. Since 2014, debt in the sector has more than doubled to £1.3bn. The nature and flexibility of this debt will have a big impact on institutions ability to cope with a big cash flow hit.
6: These pressures are not spread evenly between institutions. Some have big cash reserves. But those with significant int. students and low asset-to-income ratios could be very vulnerable.
7: What could this mean?
1) A bale out is an almost certainty and it will need to be big.
2) Not all institutions will necessarily be able to survive. Mergers or federalisation must be a distinct possibility.
3) It will certainly force a thought on purpose & function of HE
1) A bale out is an almost certainty and it will need to be big.
2) Not all institutions will necessarily be able to survive. Mergers or federalisation must be a distinct possibility.
3) It will certainly force a thought on purpose & function of HE
8: Finally: Universities will not be alone in facing these pressures. Cash is going to run out in public, private and 3rd Sector organisations.
We are going to need to think very big.
We are going to need to think very big.
Postscript: For those interested- this is the source for my data in this thread. https://www.audit-scotland.gov.uk/uploads/docs/report/2019/nr_190919_finances_universities.pdf
