English universities should not expect government bailout, says Phillipson | Universities

English universities facing severe financial difficulties should not expect a government bailout, the education secretary has said, despite warnings from the sector of thousands of job losses, course closures and even bankruptcies.

With 40% of institutions expected to face budget deficits this year, Bridget Phillipson acknowledged the crisis. She said she was “determined to ensure a brighter future for universities” and put them on a “long-term sustainable footing”.

Asked whether the government could act as a lender of last resort, she said it was up to institutions to manage their finances. “Universities are autonomous and there are expectations about how they manage their budgets. I expect them to do that without asking for help from the taxpayer,” she said.

According to Universities UK, which represents 142 institutions, around 70 universities are actively engaged in cost-cutting programmes, including job and course cuts.

Among the institutions affected are Goldsmiths, University of London, with 97 redundancies, and the universities of Lincoln, Huddersfield and Central Lancashire, but UUK estimates that “almost all” universities will be forced to make savings by the end of the year.

Speaking on BBC Radio 4’s Today programme on Monday, Phillipson declined to comment on a possible increase in national tuition fees, which have remained almost unchanged since they were raised to £9,000 in 2012, rising to £9,250 in 2017, and said there were “no plans” on finances at this stage.

She has provided some reassurance to the sector, standing up for international students and, after years of uncertainty under the last government, the Education Secretary said she would ensure the graduate visa route was maintained “so students can come here and study with certainty and confidence”.

The significantly higher tuition fees paid by international students have helped boost university finances and supplement domestic tuition fees, which are capped and have been falling in value in the face of rising inflation. However, recent measures introduced by the Conservatives to cut immigration have led to a sharp fall in international student numbers in recent months.

Announcements are also expected in Parliament this week on regulatory reforms, led by the Office for Students, which the government says will help strengthen the sector. Phillipson will announce a new chair of the OfS to succeed James Wharton, who resigned this month.

“We recognize that universities are a public good,” Phillipson said. “The first steps we’re going to take this week are around regulation. We need to focus more on regulating our sector to make sure that universities are on solid footing.”

UUK would like the government to ease the regulatory burden on universities to free up money for vice-chancellors to spend on teaching students.

Vivienne Stern, UUK’s chief executive, welcomed Phillipson’s assurances about international students but said she would be concerned if the government closed off some options at this stage. “I think we need to find a solution to this problem, otherwise things are only going to get worse,” she said.