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Government must back universities as report warns of financial crisis

5 July 2020

Universities face billions of pounds in lost income due to the Covid-19 crisis that will leave some struggling to survive warns IFS report

Responding to the analysis, from researchers at the Institute for Fiscal Studies funded by the Nuffield Foundation, UCU said the government had to step in now with a comprehensive support package to protect universities.

The report warns that universities are unlikely to be able to claw back a large portion of losses through cost savings unless they make significant numbers of staff redundant. It says that while institutions with a larger proportion of temporary staff may be able to make greater savings, this may impact on teaching quality and risk reputational damage.

UCU said government support was vital to protect jobs, preserve the UK's academic capacity and defend the quality of teaching and research. The union's own research released at the start of the pandemic warned of a £2.5bn loss in income for universities from tuition fees and teaching grants, which would result in a £6bn hit for the economy.

UCU general secretary Jo Grady said: 'This report is more bad news for higher education. It's been months since our own research laid bare the likely devastating impact of the pandemic on universities and the Office for Budget Responsibility singled the sector out as one most likely to suffer. The government has to now step in and guarantee lost funding for universities so they can weather this crisis and lead our recovery on the other side.

'This report warns of the damage redundancies can do to teaching quality and universities' reputations. Universities are already seeking to sack staff, with casual staff and those from BAME backgrounds suffering the most. We need a comprehensive support package that protects jobs, preserves our academic capacity and guarantees all universities' survival.'

More on UCU's Fund The Future campaign can be found here.

poll of prospective students released last month revealed that almost a quarter (23%) feared that the university they wanted to study at this year could go bust because of the Covid-19 crisis. Half (49%) feared that damage caused by funding cuts because of the pandemic would negatively impact on their education and over two-thirds (71%) backed a delay to the start of term.

In April, the Office for Budget Responsibility said education would be the sector hardest hit by the coronavirus crisis, with the impact likely to be felt most by universities

Last updated: 15 July 2020