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Government Proposes Emergency Loans for Struggling Universities

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

Universities in England that could face bankruptcy can apply to the government for an emergency loan.

However, any rescue package will come with conditions, such as cutting pay for vice chancellors and senior staff and making sure universities focus on subjects with better job prospects for graduates.

A recent report from the Institute for Fiscal Studies suggested that 13 institutions were facing insolvency, although they stopped short of naming names.

To avoid the collapse of a university and disruption to students the government is proposing that universities are offered a repayable loan, which would come with restructuring conditions.

Whilst there is no guarantee of support, any rescue package would see the government exerting more control over what was taught and how the money was spent. For example, universities would be expected to end courses see as being of low value, with greater emphasis on high-quality research or courses with good job prospects.

There could also be a focus on vocational and higher technical courses, however, Jo Grady of the UCU lecturers' union criticised the seeming obsession with graduate earnings as the sole measure of quality.

Meanwhile, Alistair Jarvis, chief executive of Universities UK, has called on the government to be more ambitious and to provide additional funding more widely rather than for a small number of universities in financial need.