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Treasury Undecided on University Bailout

Posted by Richard Ward

Image courtesy of Flickr, Creative Commons

Reports suggest that calls from universities for a £2bn bailout have failed to gain support in Whitehall.

The Treasury is supposedly resisting calls for a £2bn bailout of UK universities, insisting they should not receive special treatment when compared to other industries facing similar difficulties.

Despite concerns some institutions could face bankruptcy, several Whitehall officials confirmed the Treasury's opposition to a sector-specific bailout.

Those supportive of such a move warn a bailout is essential to protect the national research that will play a key role in the post-Covid recovery phase.

Universities have asked the government for this year's research funding to be doubled in order to fill an immediate £790 million shortfall this year and the forthcoming hit to their budgets caused by an expected decline in international students.

The proposal from Universities UK (UUK), promised to cut costs, accept restructuring and rein in predatory admission policies that risked leaving less prestigious universities facing bankruptcy due to students being poached by better-resourced institutions.

The chancellor of the exchequer is expected to review the proposal in the coming days and despite the resistance, an official decision has not yet been made.

The sector is continuing to press the government, suggesting that its rescue package is balanced, whilst Labour is also applying pressure and has called on the government to ensure no university will be allowed to go bankrupt.

Alistair Jarvis, the chief executive of Universities UK, said clarity was urgently needed, warning without it the industry could face significant cost-cutting in the coming weeks. He added: "Without government intervention there is a real risk that some universities will go bankrupt, which will have significant adverse impact on those local communities which can least afford it."