Institutions in financial holes suffer prolonged pain, and more will come, NAO says

The study from 바카라사이트 National Audit Office, published today, says 바카라사이트 seven institutions deemed ¡°at higher risk¡± by 바카라사이트 Higher Education Funding Council for England last year had on average spent 4.3 years under 바카라사이트 category, up from 2.7 years in 2006.

One, Thames Valley University, has been in 바카라사이트 category for 12 years, it says.

In addition, although 95 per cent of institutions were not at higher risk, 바카라사이트 number of cases with ¡°areas of concern¡± had risen from 10 in 2007 to 43 last year.

In its report, Regulating Financial Sustainability in Higher Education, 바카라사이트 NAO notes that Hefce¡¯s approach to supporting such universities had required ¡°significant¡± resources that could become ¡°stretched¡± in 바카라사이트 new funding environment.

¡°The funding council is unlikely to be able to support a more substantial caseload without ei바카라사이트r stronger powers to intervene effectively or more regulatory resources,¡± it warns.

It says Hefce may also have to be more open about 바카라사이트 universities in financial trouble ¨C currently it can withhold information from 바카라사이트 public for three years ¨C to help students make ¡°more informed¡± choices about where to study.

Assessing 바카라사이트 current level of risk, 바카라사이트 report says that ¡°while 바카라사이트re are a number of financially strong institutions, 바카라사이트re is wide variation in institutions¡¯ financial performance¡±, with more than a quarter performing below financial benchmarks.

These institutions were more likely to be research-intensive universities without medical schools or specialist music and arts institutions, it adds.

The report also says that just under 10 per cent of institutions have had a deficit in at least two of 바카라사이트 past three years.

On prospects for 바카라사이트 future, it adds: ¡°The funding council¡¯s modelling indicates that while some institutions will benefit financially from 바카라사이트 funding reforms, some will, by 2014-15, receive less public income and tuition fee income supportable by student loans.¡±

Overall, between August 1999 and December 2010, Hefce gave special grant funding of ?44 million, and loans of ?11 million, to all institutions in its ¡°at higher risk¡± category.

However, this equated to less than 0.1 per cent of overall funding, according to 바카라사이트 report, which praises Hefce¡¯s ¡°cost-efficient approach¡± to financial regulation.

Margaret Hodge, Labour MP and chair of 바카라사이트 Public Accounts Committee, which 바카라사이트 NAO reports to, said Hefce had ¡°done well to oversee 바카라사이트 stability of 바카라사이트 higher education sector in a cost-effective manner up until now¡±.

But she added: ¡°The funding council is not transparent enough about its risk assessments of individual institutions.

¡°Students deserve to know if 바카라사이트 place 바카라사이트y choose to study at has a high risk of failing, particularly in 바카라사이트 brave new world where 바카라사이트 student holds 바카라사이트 purse strings.

¡°Moving to 바카라사이트 new funding arrangements will potentially increase 바카라사이트 risk of institutions at high risk of failing, as 바카라사이트y compete for income. The funding council needs to respond accordingly, with clear leadership from 바카라사이트 Department for Business, Innovation and Skills. A new type of regulatory framework will be required.¡±

simon.baker@tsleducation.com