AT least 13 universities across the UK are at risk of closure amid a financial black hole in the sector of up to £19 billion due to the pandemic, research suggests.
They may need government bailouts, debt restructuring or mergers to survive. And up to 20 universities could go to the wall if there is a significant second spike of the virus and the country goes back into prolonged lockdown.
The Institute for Fiscal Studies (IFS) has warned that “generally less prestigious institutions” are at “greatest risk of insolvency”. This is because they “entered the crisis in a weak financial position and with little in the way of net assets”.
These institutions “may not be viable in the long run” if they are left without financial support, it adds.
The report did not name any of the institutions that were at risk of closure or if any were in Scotland.
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The IFS has estimated that long-run losses across the UK higher education sector could come in anywhere between £3bn and £19bn – or between 7.5% and nearly half of the sector’s overall income in one year. Even the most likely situation would see losses of £11bn. Around 130,000 students attend the 13 institutions most at risk.
Meanwhile, Scotland’s university and colleges minister has said the sector has been “badly bruised” by Covid-19 as he praised its response to the pandemic.
Richard Lochhead, the further and higher education minister, said colleges will be “even more pivotal” during the economic recovery from coronavirus “as we emerge badly bruised economically from the pandemic in search of stability and growth”.
Guidance will also be published this week, he said, on how to keep staff and students safe during a phased return to normality in the new term. He added the recovery of the college sector in Scotland from Covid-19 will have a “huge influence” on how the country as a whole responds.
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Writing in The Herald, Lochhead said: “The flexibility and professionalism colleges have shown in the past 100 days has demonstrated they are more than well equipped to provide not only a safe working environment for everyone, but to support students in their studies with the highest quality of learning and teaching.
“I have been a proud further and higher education minister as I watched our network react so brilliantly to the Covid-19 crisis, and would like to thank them for that collective effort.
“I am of no doubt ... they will continue to rise to the ongoing challenges of not only recovering from the effects of this once-in-a-lifetime situation, but continuing to provide the productive pipeline of the talent we need to prosper as an economy.”
He praised the switch to distance learning as well as the support given to the NHS and local communities from the sector.
He said: “How Scotland’s colleges switched incredibly swiftly to digital teaching and assessment was a brilliant shop window of their adaptive skills ... Their students and staff then rose ... to the complex everyday challenges presented by Covid-19, by offering their time, skills and much-needed materials such as personal protective equipment to both the NHS, and to some of the most vulnerable members of their own communities, to first react and now recover.”
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