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The government’s Covid-19 support package for universities

The government has announced a package of support to stabilise universities in the wake of Covid-19. Debbie McVitty dives into the details.
This article is more than 4 years old

Let’s start with a massive caveat. The government has unfathomable demands on its resources. With every day that passes, the economic impact of Covid-19 drills deeper into the country’s ability to bounce back.

But the support package announced this morning for universities falls far short of what would be required to genuinely safeguard the sector and students and catalyse their contribution to future economic recovery.

At the same time, the assumptions underpinning the package, and the conditions attached to it, put a pin in the prospect of real creative thinking about the future of the sector.

Package, special delivery

There’s no new money – which speaks to an ongoing lack of consensus within government and especially in Treasury, about how to handle universities – but there is a shift in how quickly universities can access funding already in the system. £100m in quality-related (QR) research funding will be brought forward. And, most importantly, tuition fee payments will be brought forward – presumably to the start of the academic year 2020-21, where in normal times universities would only have received 25 per cent of the total tuition income at that point.

For students, there’s a loosening of the constraints on student premium funding to universities, which can be allocated to student financial support. There’s also an indication that universities can allocate funding from planned access and participation spend, if OfS can follow the logic.

As was clarified last week, universities are also eligible to access government Covid-19 schemes which include bridging loans for struggling businesses and the job retention scheme under which some staff can be furloughed and government will cover 80 per cent of salaries and national insurance and pension contributions up to £2,500 per month.

The Department for Education has also noted that it has earmarked £100 million in this year’s budget to purchase assets for use for schools and colleges. Higher education assets are included, but that was presumably always the case – it’s just that in normal times these might be less likely to be for sale.

There’s also the promise of government working groups to be set up to look at research sustainability and updates to the government’s international education strategy to promote the UK as a destination for international students.

Those are strings, Pinocchio

The government will implement a temporary student number cap, set at universities’ forecast numbers for 2020-21, plus five per cent. The Office for Students is to be given wide-ranging – though temporary – powers to clamp down on the worst excesses of market competition, with a consultation on the new penalties for admissions practices OfS considers not to be in the student interest also launched this morning.

Some of these are not unexpected – there’s certainly no platform for unconditional offers – but the proposals are much wider-ranging than the mere issuing of offers, with patterns of behaviour, statements about what’s on offer, incentives to students, and even bypassing UCAS’ admissions system under the regulatory microscope. It puts an enormous dent in university autonomy over admissions – and sets a precedent for future regulatory oversight, even if the specific powers are intended to be limited to the current crisis. Jim Dickinson dives into the detail elsewhere on the site.

Over a barrel

Under the circumstances, universities have little choice but to welcome the package – the sector does have impeccable manners after all – though you wonder what the responses to the OfS consultation will look like. Universities struggling with cashflow issues will genuinely welcome the recalibration of payment schedules.

But the fact remains: there is no new money here, barring what universities may be able to access through the government’s job retention scheme. And the bulk of the “bailout” relies on students showing up as usual in September, even though it’s not clear at this moment what, exactly, they’d be showing up for, or whether their chosen university will be around for long enough for them to see out their qualification.

As David Kernohan has modelled, even a modest plus five per cent cap on recruitment could lead to existential losses for some institutions if UK undergraduate numbers do not hold up come September.

DfE’s statement makes it clear that, for now, universities are expected to manage with the provisions available – it’s implied that the government expects these to be sufficient for “most” providers. Where individual universities fall into financial trouble, and are at risk of closure, government may intervene “where there is a case to do so” and “as a last resort”. In these instances, government will develop a restructuring regime – details to be confirmed, but Jim Dickinson has looked to further education for some potential clues.

Even if government was ambiguous about the value of the university sector, there is a serious missed opportunity here to do something meaningful for students beyond ensuring their summer doesn’t involve managing an overflowing inbox with offers of free laptops from increasingly desperate universities.

Though information at this point in the cycle remains imperfect, particularly as students themselves are waiting to find out what the situation will be in September, there is very little in this package to inspire confidence among students whose families may be suffering the economic consequences of Covid-19, or who may be considering the merits of deferral.

Moreover, the assumption of the maintenance of the status quo implicitly rules out the possibility of more creative thinking at a sector level about how universities could better serve the needs of society in a post-Covid-19 landscape.

The reality is that this is almost certainly the best that could be done given the bandwidth and resource available within DfE and in the absence of a government-wide commitment to address the university sector’s and students’ needs. It’s a pity, though, that the measures available are so very flimsy; in years to come we might look back at this moment as the point, not when government rode to the rescue of universities and students, but when it turned its back. But, as the status quo starts to look less and less likely over the coming weeks and months, we can only hope and assume the government – particularly the Treasury – will revisit higher education and the question of how we ensure that the sector survives and thrives post Covid-19.

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