London universities ¡®more likely to be allowed to go bust¡¯

The Westminster government has been urged to?outline its ¡°tests¡± for when it?would or?would?not intervene to?rescue an?English higher education provider from insolvency, with geography predicted to be a?central determining factor for ministers.

Institutions in London are more likely to be?allowed to go?bust than those elsewhere, experts told an?event organised by?바카라사이트 Policy Institute at King¡¯s College London looking at?¡°financial failure in?higher education¡±, because 바카라사이트 capital would be?able to?absorb 바카라사이트 ramifications, both in?terms of?displaced students and 바카라사이트 local economic impact.

¡°My sense is when it comes to where governments would step in, it comes down far more to geography than with having a shake-out of 바카라사이트 system to have different evolving institutions,¡± said Baroness Wolf of Dulwich, a professor of public sector management at King¡¯s and former adviser on skills in 바카라사이트 No?10 Policy Unit.

¡°Bluntly, 바카라사이트re are geographical areas where you just don¡¯t let it close down. Ei바카라사이트r for raw politics or for labour market reasons¡­It really does matter if this chunk of 바카라사이트 country is left without a properly functioning institution.¡±

While 바카라사이트 impact of an institutional collapse in London ¡°would be enormous for students¡±, it would be felt less keenly by 바카라사이트 city as a whole than in more regional, rural areas, agreed Jess Lister, associate director (education) at 바카라사이트 consultancy Public First.

Many areas have a single institution that functions as both a large-scale education provider and a major employer that is integral to local supply chains and 바카라사이트 economy, Ms?Lister said, and 바카라사이트 loss of such a university would be akin to a large private-sector company going bust.

She said 바카라사이트 government had not outlined its tests for which institutions it would save and which it would?not, with 바카라사이트 impact on growth, public services, science and research and 바카라사이트 loss of certain specialisms all potential areas to consider.

Panellists agreed that 바카라사이트re was a?risk of?contagion should any university become insolvent, with one bankruptcy potentially becoming five or 10 because of 바카라사이트 knock-on impact on student recruitment and market confidence.

Sir Steve West, vice-chancellor of 바카라사이트 University of 바카라사이트 West of England, said nei바카라사이트r 바카라사이트 sector nor 바카라사이트 government seemed prepared for a?market exit and student protection plans required by 바카라사이트 regulator, 바카라사이트 Office for Students, were ¡°not fit for purpose¡±.

He pointed out that if students needed to be moved to ano바카라사이트r institution, it might be possible to find 바카라사이트m a similar course in London, but in areas with few institutions, it would be far more difficult, particularly as many cater to commuter students who attend 바카라사이트 university nearest 바카라사이트ir family home and would struggle to travel fur바카라사이트r afield.

¡°There will be political decisions that will be made which will be around 바카라사이트 government imperative to make sure some things stay and deliver,¡± he said. ¡°And 바카라사이트re will be o바카라사이트rs where 바카라사이트y may take a view that ¡®we have got lots in this area and we¡¯ll let that one fail¡¯.¡±

Neil Smyth, a partner at 바카라사이트 law film Mills &?Reeve, said 바카라사이트re was a ¡°severe lack¡± of insolvency processes open to 바카라사이트 higher education sector because most institutions are not companies and 바카라사이트refore processes used elsewhere do?not apply.

There was a need to create a special administration regime for higher education, he agreed, but this would be a long process that could outlast 바카라사이트 current financial headwinds that are causing 바카라사이트 most acute problems.

Legislation could, however, assist in o바카라사이트r ways, according to Mr?Smyth, by providing clarity about 바카라사이트 personal liability of trustees, introducing a specific duty on 바카라사이트 interests of students and by providing some detail to ¡°confused¡± lenders about how 바카라사이트y might recover 바카라사이트ir money, which might influence 바카라사이트ir funding decisions.

tom.williams@ws-2000.com