The Financial Times headlines today (Universities’ plea for £2bn bailout falls on deaf ears in Treasury) on the financial impact of Covid-19 on UK universities
Hmm. Not so sure they (or should I say we) have such a strong case for support …
Some numbers from the HESA webpages (statistics for all UK universities, 2018-2019). First income, then expenditure.
| Tuition fees and education contracts | Funding body grants | Research grants and contracts | Other income | Investment income | Donations and endowments | Total income | |
| 19,885,381 | 5,332,370 | 6,575,362 | 7,624,063 | 388,545 | 700,876 | 40,506,597 |
| Staff costs | Fundamental restructuring costs | Other operating expenses | Depreciation | Interest and other finance costs | Total expenditure |
| 25,971,332 | 124,223 | 14,432,197 | 2,642,666 | 843,137 | 44,013,555 |
The prospective income loss for 2020-21 appears to be around £3bn, mainly from lower numbers of overseas students, more in subsequent years. The current 2019-2020 income loss is around £0.75bn according to the FT (I would guess mainly other income lost due to cancellations of accommodation booking and conferences) so only around 2% of revenues.
On my “special scheme” there is no case here. Revenue loss is less than 10% even next year ( assuming as we can expect that the government maintains funding for student loans, for the direct grants and the research grants). It is true that cost cutting is not easy (even when enrollment numbers fall, you still need to the teaching staff to deliver modules). But there is also a lot of “fat” in the system. Any institution should be able to cope with revenue loss of 10%.
Impact will be uneven, some financially weak institutions could be in difficulties with much greater loss of revenue than 10%. But mechanisms can be introduced to limit “poaching” of students (reputable institutions will want to take more first year students than they can squeeze into lecture rooms, reducing numbers for other institutions). No case, to me, for special support.