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One in three English universities at risk of serious impact from government funding cuts

8 December 2010

More than one in three (38%) English higher education institutions have been labelled 'at risk' as a result of higher education funding changes proposed by the government.

Report also reveals impact on local economies of higher education funding cuts

'Universities at risk – the impact of cuts in higher education spending on local economies', published today by UCU, places 49 of England's 130 higher education institutions at 'very high', 'high', or 'high-medium' risk of serious impact from the proposals, which could leave them vulnerable to merger or, in the worst-case scenario, closure.

The spectre of closure was raised in a September survey that found 9 out of 10 university leaders thought a university would be forced to close. In November, Vince Cable said that a number of universities were essentially bankrupt and should not be propped up by the government, adding if they were private businesses they would have gone under by now.

The report used four key indicators to score each university in terms of how much they will be affected by the government's proposals for higher education. The indicators looked at universities' reliance on public funding, the proportion of public funding an institution receives for 'non-priority' subjects, the number of students from the poorest backgrounds, and an institution's reliance on non-EU students' fees.

It found four institutions – Bishop Grosseteste University College Lincoln, Edge Hill University, Newman University College and Norwich University College of the Arts – are at 'very high' risk. A further 23 are labelled as 'high' risk, and another 22 are 'high-medium' risk.

In addition, the report draws on research, UK Universities and the economy, carried out for UCU by Ursula Kelly and Iain McNicoll at the University of Strathclyde, which demonstrates the impact universities have on their local economy by creating jobs and revenue far beyond the confines of campus.

That research recognises that a university acts as a large business which creates a diverse range of jobs both on campus and across businesses in the region. It shows how many full-time jobs, both on campus and across small businesses in the region, each £1m of university revenue equates to. It also demonstrates the multiplier effect in terms of funding lost elsewhere in other industries, such as manufacturing, distribution and business services, for every £1m removed from higher education in the UK.

UCU general secretary, Sally Hunt, said: 'In reality, more than one in three of England's universities could find themselves in real trouble once the landscape of higher education changes and funding cuts bite. The worst-case scenario is closure – something university leaders and the business secretary have both acknowledged is a possibility.

'Universities are a major player in their local economies, creating masses of jobs on and off campus, and generating revenue through any number of related small businesses. Their impact reaches far beyond students and lecturers – they are wealth-creators for communities. It is a brave MP who decrees that any institution should be allowed to go to the wall.'

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