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Universities to get 'payday loan' sticking plaster. UPDATE. FE Colleges to be taken over


UPDATE. FE Colleges in England to be taken over.

Although not about universities at this time, the news that the government is planning to take over Further Education colleges in England must come as a sharp jolt. 



Yesterday, the Further Education newsletter,  FEWeek, published the article 'Government to take ownership of colleges'. The reasoning behind a white paper urgently under preparation is that the number of colleges in "formal intervention over their finances" has hit over thirty. This will mean that the financial freedom unleashed by the 2011 Education Act must now be reined in. FEWeek cites the annual report for 2018/19, the FE Commissioner, Richard Atkins noting problems as "frequently the result of poor governance and leadership over a number of years, resulting in weak decision-making”.  If, or when, similar problems emerge in our universities, then they might expect a similar knock on the door from the government. Who knows what the might find under the rocks around the various campuses. Expect senior mamanement pay to take the first hit.

Original post
The announcement today by the government, via the Department for Education, revealed the level of support our universities will be offered, and it comes as no surprise. The type of support has all the qualities of a ‘payday loan’. They can access funds in advance of their normal income cycle for fees and worry later. In essence, that is all it is. To extend the metaphor further, it is little more than a sticking plaster over a gaping wound that has opened up for our universities and students alike. Students will be particularly severely affected as they try to bridge the widening gap in their income next year. The support for universities must now be matched with support for students who will have to proceed without job income and with declining family support. The move today must be only the start of a wider process and a working group on student support should be started urgently.


The package of support for universities announced today goes some way to bailing out universities that find themselves in a difficult financial position (
Government support package for universities and students). However, it will only keep the wolf from the door for a limited period. There is no solution offered for the shortfall in international students and strict caps will be imposed on UK and EU student numbers. The full offer ‘Government support package for higher education providers and students’ is less than four pages and has a ‘hasty’ feel about it. There is clearly a lot more detail to be added to the basic proposals. However, there is some evidence of joined-up thinking as it has been issued jointly by Education Secretary, Gavin Williamson, Universities Minister, Michelle Donelan from the Department for Education (DfE) and research Minister, Amanda Solloway at the Department for Business, Energy & Industrial Strategy (BEIS).

The basic plan is to offer universities their projected fee income in advance to tide them over a difficult period. This does nothing to offset the losses that will accumulate over the next academic year, but it will avert an immediate crisis.

Capped student numbers and research are top priorities.

Most of the proposals are centred on the universities and not on students per se. As expected, the Office for Students has imposed a cap on student numbers and outlined strict rules with draconian penalties for infractions. This is geared to preventing universities from poaching students from other universities with ‘OFS Regulator warns of penalties for recruitment practices that undermine student interests and stability of higher education’. The fact that this is needed at all is itself a sad indictment of a system that feeds on market competition. Now there will be regulation of numbers and penalties of £500,000 “or in some cases beyond” for each infraction or breach. These include changing student recruitment practices in an effort to increase student intake, making misleading statements about other universities, making decisions that do not demonstrate high standards of good governance such as “using government financial assistance for purposes that do not serve the interests of students or the public”, failing to comply with public commitments and bypassing UCAS admissions processes where they would normally use them. It is easy to imagine some universities making multiple blunders and racking up several millions in fines. All of this means that there will be even greater government scrutiny of their operations and finances that means a new definition of the word ‘autonomy’.

The sustainability of research capacity is also a source of concern. It is likely that an earlier admission by Universities UK that fees from international students were being used to support research has led to this. Now, the proposal is to set up “a joint DfE/BEIS Ministerial Taskforce on university research sustainability”. This will be led jointly by Science Minister, Amanda Solloway (of BEIS) and Universities Minister, Michelle Donelan (of DfE). It is also encouraging that this initiative “will involve the Devolved Administrations and key stakeholders”. It is, however, unfortunate that a task force has not been established to address student support in a similar manner.

What is in it for students?

It is encouraging that the proposals at least acknowledge the need to enhance hardship funds for students currently in difficulty. This is proposed by working with the Office for Students “to enable providers to draw upon existing funding to increase hardship funds and support disadvantaged students impacted by COVID-19”. However, the sum involved is exceedingly small and does not address the full financial impact of the crisis. The support states that “providers will be able to use the funding, totalling £46m across April and May, towards student hardship funds and mental health support, as well as to support providers’ access and participation plans”. This offer is no more than they already have available and will not be able to offset the loss of income that many students are suffering now and into the future. With most students losing their part-time jobs, the situation looks bleak. Those planning to enter or return to university in 2020/21 will only now be looking at the prospect of surviving without income from a job. The numbers involved are very large (see TEFS 29th November 2019 ‘The cost of equalising the HE experience’) and universities may only now be waking up to the extent of part-time work their students are subjected to. Add to this the simple fact that families have lost jobs in staggering numbers, and support for their student family members will have declined. It is therefore hard to imagine a student with limited family support deciding to take a leap of faith to rely upon a university hardship fund to survive. On the other hand, it is likely that universities will rebrand hardship funds as ‘COVID-19 crisis support’ to attract students. This marketing ploy is something that the OfS will not be likely to object to. However, it is debatable if this will be enough.

The government approach to attract students is to offer support through UCAS so that the options are widened in the annual summer clearing process with ‘UCAS More personalised options and support than ever for students in Clearing 2020’. They will be able to see online “a personalised list of available courses”. This is welcome news, but it is based upon some degree of optimism as posted by UCAS on 3rd April with ‘A level students still setting their sights on undergraduate study’ that stated: “Almost nine out of ten undergraduate applicants in the UK have not changed their mind about wanting to start university or college this autumn”.

However, a detailed report of a survey by the Sutton Trust out today paints a very different picture with 20% of students considering a change of mind on university this year. The full research brief ‘COVID-19 and Social Mobility Impact Brief #2: University Access & Student Finance’ outlines the terrible effects impacting students from less advantaged backgrounds. It is a major mistake for this obvious point to be missing from the government plans.

Varied reactions.

At the time of writing, there has not been an immediate response by the National Union of Students (NUS). However, it seems likely that they will be seeking more support for students since they recently called for a safety net to be established, ‘NUS sets out safety net needs for students’. This is good advice that will need to be coordinated across the UK and not left to individual universities to sort out.

The response by Universities UK ‘UUK response to UK government announcement on support package for universities’ makes little mention of students and support for them. Instead, they are exercised by “further support to protect the strength, capacity and quality of the research base”. By way of contrast, the Million+ group of universities ‘MillionPlus comment on the government support package for universities and students’ is concerned about student recruitment but does acknowledge disadvantage with "Student recruitment is an essential part of this much-needed stability - universities will doubtless engage positively with proportionate measures to ensure that prospective students are not disadvantaged in this period of uncertainly.”

The almost unqualified positive response by the University Alliance ‘UA welcomes government support package’ seems strangely detached from the impending reality with “The temporary measures outlined will protect the ability of current and future generations of students to choose from a diverse range of world-class providers”.
The University and College Union that represents most of the staff in the sector was not impressed with the extent of the package with ‘Government support package for universities doesn't provide protection the sector needs’. They have every right to be concerned since the current redundancies are likely to continue apace with only a slight delay.

Other significant and influential observers have responded with the Higher Education Policy Institute response leading the way early on cautiously “While we need time to digest the finer details, this seems like a carefully-calibrated package”. WONKHE is less reticent in their critical response by observing that it “falls far short of what would be required to genuinely safeguard the sector and students and catalyse their contribution to future economic recovery”. Indeed, they go further by saying that “the assumptions underpinning the package, and the conditions attached to it, put a pin in the prospect of real creative thinking about the future of the sector”.

The various media outlets offer different takes on the proposals. The BBC noted straight away that students are important with ‘Coronavirus: Online students face full tuition fees’. Times Higher Education, along with others saw through the announcement with ‘Ministers announce UK sector support measures, but no bailout’. The Guardian also lead with the stark reality ‘Government refuses multi-billion pound bailout for universities’ whilst the Telegraph prefers ‘Caps on university student numbers to return to avoid 'scramble' for undergraduates’.

A TEFS outlook.

Whatever the response from various quarters, it seems that the government’s measures are only a short-term solution. Indeed, that may well be the intention at a time of high stress for all. It is now up to universities to get ahead of the game and define further the challenges ahead. Last Friday TEFS suggested that a task force be set up urgently to look at a wide range of issues and particularly the demands put on student support in the coming academic year (See TEFS 1st May 2020 ‘Bring back Augar and put students first to offer hope’). It will take cooperation from several stakeholders to achieve consensus and a better system for the future. This would mean working with universities, staff, students and government. TEFS outlined a stark alternative with ‘Competition or bust in Higher Education: a zero sum game’ on 24th April and it is hoped that this could be avoided. However, there are still too many competing interests evident and much more needs to be done. Without further action, the least advantaged students will find they cannot attend university and dissipate. Then many staff will begin to lose their jobs in sizeable numbers. TEFS reiterates its earlier plea that “a working group involving students (such as NUS), staff (such as UCU) university managements (such as UUK and others) and the government must work now in advance of the spending review”. While it could be thought of as ‘tongue in cheek’ to mention Philip Augar, it would be good to see a level of independence leading the working group.


Mike Larkin, retired from Queen's University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics. He has served on the Senate and Finance and planning committee of a Russell Group University

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