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Government to make speedy response to bailout request

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Government’s first thoughts on Universities UK’s coronavirus support package could come as soon as today

An initial government response to proposals for a multi-billion-pound support package to save universities from financial ruin may come later today, Research Professional News understands. However, in a fast-moving situation the announcement could be held until early next week.

The speed of government action on a bailout for universities is in contrast to other higher education decisions that have been delayed, such as the government’s response to the Augar report and the statutory review of the Teaching Excellence Framework.

The government will be making a quick response to a proposal from Universities UK, which last week outlined what support institutions need to avoid “financial failure” as the coronavirus hits student recruitment and other income-generating activity. The proposed package is believed to be around £2 billion.

Research Professional News has asked the Department for Education to confirm that the government response is expected by the end of the day.

UUK wrote to government ministers last week asking for bridging loans to support universities suffering “significant income losses” and needing temporary support “to maintain cash flow” until student numbers recover.

In its proposal, UUK warned a severe squeeze on the international student market as a result of the pandemic could see UK-wide losses of £6.9 billion in tuition fee income, while £790 million could be lost from accommodation, catering and conference income, and extra spending on online learning.

On 15 April an analysis by the Institute for Fiscal Studies said the fee income from international students in UK universities amounted to nearly £7 billion last year, around 17 per cent of the total income of the sector (37 per cent of total fee income).

“Without proactive action from both institutions and support from government…some universities would likely face financial failure, with severe impacts on their students, staff, local community and regional economy,” a statement from UUK read on 10 April.

The vice-chancellors’ body also called for a “one-year stability measure” in the admissions process to stop a scramble for students in the autumn, putting further pressure on struggling institutions. The de facto cap would mean universities in England and Wales could recruit UK and EU-domiciled full-time undergraduate students up to the sum of their 2020-2021 total forecast intake, plus 5 per cent.