Universities face cash ‘catastrophe’ with threat of mergers and course cuts (2024)

Universities are facing a financial crisis before the new academic year with an analysis finding that scores will have to cut courses, shut departments and put thousands of jobs at risk.

Three leading institutions are understood to be in serious peril and ministers are being urged to introduce an emergency rescue package to avert “catastrophe” and prevent bankruptcies.

The government is considering merging one medium-sized university with another and is drawing up plans to “tackle problems within the sector”.

This week, Bridget Phillipson, the education secretary, is expected to appoint a new interim head of the Office for Students, the regulator that ensures students get value for money and upholds standards of education, to spearhead the recovery.

Top of a list of inherited challenges

It has forecast that 40 per cent of England’s universities will run budget deficits this year and warned of closures and mergers. In a sign of the scale of the crisis, a senior Whitehall source said that it “has been at the top of a list of challenges inherited from the last government”.

Last week, the University and College Union (UCU) held talks with Phillipson and Jacqui Smith, the skills minister, to urge action to save jobs.

Jo Grady, its general secretary, spelt out her concerns to them in a letter. “Anything short of an emergency rescue package for the sector will be insufficient to stave off catastrophe,” she wrote.

“This funding package should, though, come with conditions such as ensuring jobs are protected.”

Academics belonging to the union have drawn up a list of 66 universities ­— more than a third of Britain’s total — that have faced financial difficulties over the past year, with many cutting jobs and courses.

A former university vice-chancellor said that the cuts could mean that students due to start their degrees in September could find courses unavailable.

The UCU has used an independent auditor to go through the accounts of universities, including recent monthly updates.

“We think there are three universities we have been able to identify that could be close to financial collapse and would benefit from state intervention and support,” Grady said. “If they do not get state support they will struggle still and use cuts to staff as shock absorbers. We see this as a systemic crisis. We don’t think parents and prospective students understand the total mess some of our universities are in.”

The 66 include Goldsmiths, University of London, where one in seven jobs were threatened, and Lincoln, where one in ten staff accepted voluntary redundancy.

Hundreds of academics made redundant

Kent lost about 50 academics on a voluntary redundancy programme, while Keele opened a similar scheme to its 2,300 staff.

At Oxford Brookes, 20 jobs are at risk; at London South Bank, more than 200 posts were at risk; and at York, 413 redundancies are in the pipeline.

Goldsmiths’ proposed redundancies included half of the history and sociology department and a third of all English and creative writing academics.

Michael Rosen, the former children’s laureate, saw his post of professor of children’s literature put at risk. He said he had learnt recently that his job was now safe but the MA in children’s literature he teaches could still close.

“I’m not ‘in scope’ as the jargon has it [at risk of redundancy],” he said. “What’s happening at Goldsmiths is a disaster. Slashing the number of staff means whole courses are being closed down, and the essence of what Goldsmiths has offered in terms of diversity, is being wrecked. It’s heartbreaking.”

At Winchester, which describes itself as “the university for sustainability and social justice”, jobs have been lost at departments including the climate and social justice institute.

‘Glorified FE colleges’

Robert Beckford, the university’s only black professor who was the director of the institute, was made redundant this month. He said universities that axed such subjects and focused on vocational subjects could become “little more than glorified FE colleges”.

Arts and humanities degrees are being targeted for closure because lucrative overseas students who pay high fees prefer to study science and technology degrees.

Universities are heavily dependent on tuition fees, which account for half of their funding. However, levies for UK students have risen by only £250 since David Cameron’s government raised the cap to £9,000 a year in 2012.

Costs have soared because of energy bill rises, inflation and compensation for students affected by lecturers’ strikes over pay and pensions. Universities say they make a loss of more than £3,000 on each domestic student.

Many institutions have also run up large debts after trying to expand quickly. To boost their income, they have enrolled heavily from countries such as China, India and Nigeria, whose students pay up to £38,000 in tuition fees. The recent cap on visas for overseas students has hit the intake, adding to the financial woes.

Official figures released on Friday revealed another slump in the number of both UK and overseas students applying to start degrees in September.

Merging four faculties

Oxford Brookes said it had drawn up a “financial sustainability” plan, which included merging four faculties into two and offering at least 20 staff redundancy.

Kent said it had reduced a £25 million deficit to £17.5 million. About 50 staff have been shed by voluntary redundancy, and courses including art history and journalism have been cut.

Goldsmiths said: “This is a painful time … as we take steps to make our finances sustainable. We want to see the arts, humanities and social sciences valued on a par with science and engineering.”