13 UK Universities Faces Insolvency
Thirteen universities face a prospect of insolvency following the coronavirus crisis unless they receive a government bailout, a study suggests.
High-ranking universities with large numbers of international students face the largest immediate drop in income, says the Institute for Fiscal Studies.
But the least prestigious universities are at the greatest risk, says the IFS.
The IFS does not name the universities, but says a targeted government bailout would be the most cost-effective plan.
The fallout from Covid-19 "poses a significant financial threat" across UK higher education, with most institutions left with reduced net assets, says the analysis.
They say the total size of the sector's losses is "highly uncertain" - anywhere between £3bn and £19bn, or between 7.5% and almost half the sector's annual income.
The researchers' central estimate is an £11bn loss, amounting to a quarter of the sector's annual income.
In addition, universities which are running pension scheme deficits will see them widen during the pandemic as investments stagnate.
But there are big variations between institutions, says the study.
Universities with many international students which also have substantial pension obligations are often also higher-ranking institutions, with ‘large financial buffers’ and the option of alleviating losses by admitting more UK-based students.
