Universities need to be saved from bankruptcy during this crisis

Emma Hardy MP, Shadow Minister for Universities, has called on the government to underwrite higher education funding to protect and prevent institutions from going bankrupt as a result of the coronavirus crisis.

An over-reliance on international tuition fees and an unequal regional distribution of research grants mean higher education finances are vulnerable to the crisis. And without government support, Labour is concerned that many universities face closure or having to operate at a reduced capacity, with a damaging knock-on effect for jobs and social mobility.

In a letter to the Minister of State for Universities, Emma Hardy said:

“Labour is calling on the government to guarantee that no university will be allowed to go bankrupt.

“The coronavirus pandemic has exposed the failures and weaknesses within the government’s higher education policy.

“Our universities are not just businesses and should not be treated as such. Our higher education institutes provide value to our country every day, supplying final year medical students to fight on the frontline of our NHS, creating PPE, and providing accommodation for key workers.”

A full copy of the letter reads:

Dear Michelle,

Thank you for arranging the phone call meeting yesterday to discuss the actions you’re taking as University Minster during the COVID-19 pandemic.

Our Universities provide enormous value to our country every day. Currently they are playing an important part in the country’s fight against COVID 19. Research on vaccines and testing, supporting final year medical students on the frontline of our NHS, creating PPE, providing free accommodation in Halls of Residence for Key Workers are among the many examples of their efforts.

As we discussed, the current coronavirus pandemic is causing many problems for Universities across the country and not least of these is financial insecurity. The expected fall in international student numbers alone will result in a loss of around £6.9 billion. The UK higher education sector is facing an unprecedented set of challenges.

My greatest concern is that a failure to provide timely and comprehensive support to our universities in the face of this crisis will create “cold spots” in the country for access to higher education to those who benefit from it the most. We know that students from disadvantaged backgrounds, and part-time and mature students, make up the large proportion of commuter students and they will suffer disproportionately if regional HE institutions close.

Universities bring significant benefits to their local communities. They play a central role in supporting local economies, employ large numbers of staff and contribute enormously through volunteering, cultural events and community activities. If these institutions were to disappear, the damaging consequences would extend beyond the classroom and impact locally and nationally.

As I stressed during our meeting, universities will play a vital role in the recovery and future prosperity of our country. It is essential therefore, that no institutions are allowed to fall. I welcome your comments that you are looking closely at the Universities UK proposals for comprehensive sectoral support and I would ask again for you to provide a clear message that the security and certainty our Universities are desperately looking for will be available. Allowing any HE institution to fall hinders the ability of our economy to bounce back from this crisis and denies UK citizens the equality of opportunity that should be a given right.

With COVID-19 creating an uncertain future for international students, many universities are facing a huge reduction in income which could have catastrophic effects on their ability to operate. I welcome your comments that UK Universities are “open and accessible” and I would ask if you could speak to your colleagues in the Foreign and Commonwealth Office to have a joined up approach in promoting our UK universities and addressing some of the concerns held by some countries on the validity of ‘online degrees’, if only as a short-term measure. It would also be useful to have increased clarity from the Home Office about student visas too.

There are few certainties post COVID-19 but one thing we do know is that the job market will change and there will be an acceleration of the need to retrain and upskill the country. I would welcome future discussions about how part time education can be rebuilt following the precipitous decline over the last five years.

Not only are the institutes themselves facing an uncertain future so are thousands of students. During this crisis many students who relied on part-time work can no longer support themselves and will require access to additional financial support and I would urge you to consider what financial support can be given.

Some universities have been proactive in cancelling rent for University accommodation and contacting private providers to request that they also cancel rent costs but action has been ‘patchy.’ Please could you work closely with your colleagues in the Housing team to send a clear message to private student accommodation that continuing to charge students rent for accomodation they cannot access is unacceptable.

I welcome your comments that students who have faced severe disruption to their study should not be required to pay tuition fees again if they need to retake courses but I would ask for more clarity on who would cover the additional costs.

Universities cannot ignore their duties under the Equality Act to support students with SEND accessing remote learning and you have my thanks in supporting this message and working with the sector to ensure this happens.

I would urge you to look again at convening representatives from institutions, examinations bodies, practitioner unions and students organisations to agree on the timing and character of teaching in the new academic year and ensure that this is communicated clearly to students.

I have significant concerns that we could see an increased drop-out rate when the semester starts again and further decline in the number of students from lower economic social groups attending university because of the cancellation of face to face widening participation events and visits. I am also concerned that teacher assessment, an unequal home schooling experience and ‘digital poverty’ will result in a weaker performance of BAME groups and pupils from disadvantaged backgrounds and that this in turn could impact student admissions. I am keen to know what actions you are taking to ensure that the already disadvantaged are not further disadvantaged. I know this is an area where we can work together – and the sector is committed to addressing these issues too.

We both share concerns about the potential impact the crisis could have on students’ (and staff’s) mental health and wellbeing and that University student support services will be stretched so I would welcome clarity on what additional support the government can provide.

I look forward to continuing to work with you, working towards solutions to the challenges that have been presented to us during this crisis and ensuring our world class university sector remains world class for future generations.

Best wishes

Emma Hardy

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