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Union 'absolutely right' in warning on university finances - UUK response to London Economics report

​In response to research published today by London Economics for the University and College Union, Universities UK welcomes the new independent analysis into the potential economic and societal impact of the challenges posed by the Covid-19 pandemic in higher education. 

The report highlights the huge scale of the potential impact on students, universities, the jobs market, local communities and the wider economy if urgent action is not taken by government.

Universities UK has recently published a balanced package of proposals to government to mitigate these challenges and ensure the sector is able to play a key role in the UK’s recovery and awaits a response from government to this.

The Chief Executive of Universities UK, Alistair Jarvis, said:

“Universities have a vital role to play in the recovery of economies and communities. This helpful report highlights the critical financial risks for the sector which not only threaten this role but put some universities at risk of financial failure.

“The union is absolutely right to warn of the knock-on impacts this would have for jobs, regional economics, local communities and students.

“Government must take urgent action to provide the support which can ensure universities are able to weather these very serious challenges, and to protect students, maintain research, and retain our capacity to drive the recovery of the economy and communities.”

Universities UK’s own analysis shows that some institutions will be particularly impacted by any combined reduction in international student numbers and increased deferrals. Those are likely to have higher levels of external borrowing and lower levels of cash reserves.  This limits the ability of the most vulnerable institutions in this scenario to increase their borrowing to mitigate the consequences of reduced student numbers. 

Meanwhile institutions facing the greatest financial pressure in general have higher proportions of BAME students. This would mean that this group could be disproportionately affected if their institutions face financial difficulty and their institutions’ ability to provide a high-quality student experience is affected.

 

Notes to editors

  1. Universities UK is the collective voice of 137 universities in England, Scotland, Wales and Northern Ireland. Its mission is to create the conditions for UK universities to be the best in the world; maximising their positive impact locally, nationally and globally. Universities UK acts on behalf of universities, represented by their heads of institution. Visit: www.universitiesuk.ac.uk 


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