Another bail out?

So is there really £360m in DfE for loans available to help the higher education sector restructure?

A since-removed Department for Education job advert for a “Deputy Director FE/HE Improvement and Intervention” (first spotted by my colleague Michael Salmon) suggests as much. Part of the job description mentions:

Delivery of a major programme to support institutional restructuring, with budgetary responsibility for a facility of up to £360m of loan funding to support structural change.

The figure of £360m is roughly twice what was spent on “restructuring” in 2024-25 according to HESA finance data. It’s not even clear whether or not this aimed at HE, FE, or both – but it does prompt us to consider what a bailout or restructuring programme might look like.

Last time we were expecting the government to step in and stave a financially imperilled higher education sector was during the Covid-19 pandemic.

The first attempt was reprofiling existing funds – an advance in QR payments, permission (long since become the default) to use the student premium magic money twig for student hardship funds, and access to the kind of general support available to enterprises of all kinds. And a temporary student number cap – which didn’t actually end up happening.

Second time round was research funding – a belated acceptance that much of the UK’s innovation competitiveness was built on international student tuition fees. That actually did include new money: £280m for UKRI project extensions, and 80 per cent of the value of international income that would otherwise be spent on research, three quarters of which were loans but a glorious 25 per cent appeared as actual cash.

And then came the restructuring regime.

The restructuring regime took great pains to insist it was absolutely not your friend. A notification that things were going awry would start an “open book” discussion with DfE which – at best – led to management consultants telling you how to run your provider (assuming DfE could be convinced it could just let you fail and have local FE colleges pick up the level 4 and 5 slack). If you plus the consultant could come up with a plan to save your university, there was possible access to a loan.

It only ran for a year and a half (July 2020 to December 2021) and as we understand it very few providers were even slightly tempted to get in on it.

Last-ditch funding has a higher profile in further education. The Technical and Further Education Act 2017 contains provisions introduced in 2021 that provide for a “special administration regime” – an answer to the question of what happens when an FE college enters insolvency. Answers as to what would happen to certain forms of university in those circumstances are harder to come by. There’s a Further Education Commissioner who currently supports the sector in a much more supportive manner. But the scheme everyone remembers is the further education area reviews – the back end of the 2010s saw the government get stuck into colleges to design a sector that was both financially sustainable and locally useful.

The themes are clear. When it comes to financially saving providers of public services, the government very much expects to get its own way. Even to get a loan (and honestly, ask your bank first) you need to be willing to hand over the design and operation of your institution to do pretty much exactly what the government wants.

It makes sense. If your plea is that you – as an autonomous provider – will struggle to deliver the services that the taxpayer funds you to offer, it feels like the government will want to preserve the services rather than the provider. The rich and proud history of your university is not really, in Treasury terms, an asset.