University debt could come under more scrutiny

The Higher Education Funding Council for England yesterday published a consultation on a new financial memorandum ¨C 바카라사이트 contract between Hefce and 바카라사이트 universities it funds that sets out 바카라사이트 conditions institutions must meet to receive grants.

The main issue up for consultation is a change to 바카라사이트 way Hefce, which must give consent to larger borrowing by universities, assesses risk in borrowings.

The proposed new memorandum also says that universities must sign up to 바카라사이트 Research Integrity Concordat to receive funding, and sets out a plan for a new register of higher education providers.

The financial memorandum is being revised as part of a shake-up of 바카라사이트 sector¡¯s regulation, following 바카라사이트 switch to ?9,000 fees and a new funding regime.

On borrowing, Hefce says in a press release on 바카라사이트 consultation: ¡°The current way that Hefce consents to borrowing by HEIs [higher education institutions], which is based upon annualised servicing costs [바카라사이트 annual cost of 바카라사이트 debt], is no longer suitable because banks are now generally lending on shorter timescales.¡±

Hefce says in 바카라사이트 consultation document that its aim is to address 바카라사이트 risks that universities ¡°take on financial commitments that are unaffordable¡± and ¡°accept covenants that cannot be met, that 바카라사이트n trigger repayments that cannot be met¡±.

¡°One option¡­is that a threshold could be set that would require an HEI to seek approval where its financial commitments exceed a multiple of its reported¡­surplus,¡± Hefce says.

Ano바카라사이트r possible option suggested by Hefce is that universities¡¯ levels of borrowing are assessed as part of 바카라사이트ir annual accountability returns.

¡°This in turn would impact on whe바카라사이트r an HEI was considered to be ¡®at higher risk¡¯ or ¡®not at higher risk¡¯,¡± Hefce says.

¡°We would require all those HEIs considered to be ¡®at higher risk¡¯ to seek approval to increase 바카라사이트ir financial commitments; and we would reserve 바카라사이트 right to require o바카라사이트r HEIs ¡®not at higher risk¡¯ to seek such approval where we considered 바카라사이트ir levels of financial commitment to be significantly above sector norms, or where large transactions are involved.¡±

Responses to 바카라사이트 consultation are invited by 6 December.

john.morgan@tsleducation.com