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Universities: Finance

Question for Department for Education

UIN HL6527, tabled on 6 July 2020

To ask Her Majesty's Government what plans they have, if any, to support any UK university which faces financial failure.

Answered on

20 July 2020

The government understands that the COVID-19 outbreak poses significant financial challenges to the sector. In May 2020, the government announced a package of measures combining different ways to give further support to higher education providers at this time of financial pressure.

We have stabilised admissions and are pulling forward an estimated £2.6 billion worth of forecast tuition fee payments to ease cashflow pressure this autumn. We are also bringing forward £100 million of quality-related research funding for higher education providers in England in the current academic year.

This is on top of the unprecedented package of support for businesses already announced, to help pay wages, keep staff employed and support businesses whose viability is threatened by the outbreak. We recently confirmed universities’ eligibility for these schemes, which the Office for Students estimates could be worth at least £700 million, depending upon eligibility and take-up.

In June, the government announced further UK- wide support in the form of the Department for Business Energy and Industrial Strategy’s research stabilisation package. More details are available here:
https://www.gov.uk/government/publications/support-for-university-research-and-innovation-during-coronavirus-covid-19.

In July, the government announced the higher education restructuring regime, under which support for restructuring can be given, as a last resort, when other steps to preserve a provider’s viability and sustainability have not proved sufficient. More details are available here:
https://www.gov.uk/government/publications/higher-education-restructuring-regime.

To prevent exploitative admissions processes, the Office for Students introduced a temporary registration condition designed to address specific circumstances relating to the impact of COVID-19. To ensure a fair, structured distribution of students across providers, temporary student number controls have been put in place for full-time, undergraduate domestic and EU students for academic year 2020-21 (with certain specific exemptions).

We are reminding providers, as part of existing programmes and using established procedures, that the department will consider purchasing land and buildings where they can be used for new or expanding schools and colleges in England. In this financial year, we have budgeted up to £100 million to acquire sites for planned projects in England.

The government has been clear that our world-leading universities will always be open to international students. Our review of the International Education Strategy this autumn will respond to the new context and the challenges posed by COVID-19 across all education settings to ensure we can continue to welcome international students in the future.

The government has worked with the Office for Students to help clarify that providers can draw upon existing funding to provide hardship funds and support disadvantaged students affected by COVID-19. Providers are able to use the funding – worth around £23 million per month for July, August and September – towards student hardship funds.

The Department for Education and the Department for Business, Energy and Industrial Strategy have set up a University Research and Knowledge Exchange Sustainability Taskforce to consider how best to respond to the challenges universities face on research as a result of the COVID-19 outbreak.