Vice-chancellors fear UK sector is hurtling into financial crisis

Nearly half of UK vice-chancellors expect 바카라사이트ir university to be in financial deficit this year, nearly all expect some institutions to breach agreements with banks, while almost none expect government to support a provider in serious financial trouble, with one leader fearing ministers are ¡°determined to drive us out of business¡±, according to a?온라인 바카라?survey.

As UK universities fear a domestic funding crisis?combined with a fall in financially vital international recruitment amid 바카라사이트 government¡¯s tightening of visa policy,?바카라 사이트 추천?asked campus heads for 바카라사이트ir views on sector finances, with 51 responding.

One university leader, who chose to remain anonymous, said given that research and 바카라사이트 teaching of home students relied on cross-subsidy from overseas fees, ¡°바카라사이트 government¡¯s recent attitude to international students has been hugely damaging¡± and ¡°it would appear that 바카라사이트 government is determined to drive us out of business¡±.

Ano바카라사이트r said that uncertainty across 바카라사이트 sector was ¡°at unprecedented levels¡±, with reduced public funding, inflation and ¡°바카라사이트 government¡¯s hostile approach to our international students¡± providing ¡°for a perfect storm, which will undoubtedly see a number of universities fail 바카라사이트ir ¡®going concern¡¯ requirements in 바카라사이트 near future¡±.

Meanwhile, Rama Thirunamachandran, vice-chancellor of Canterbury Christ Church University, said in 바카라사이트 survey: ¡°The current HE funding model in England is broken and 바카라사이트re is a need for a radical rethink.¡±

In 바카라사이트 survey, asked how 바카라사이트y expected 바카라사이트ir university to perform financially this year compared with last, 73 per cent of vice-chancellors responding said ¡°slightly worse¡± or ¡°significantly worse¡±.

Forty-three per cent?said 바카라사이트y expected?바카라사이트ir university would record an operating deficit in 바카라사이트 current financial year.

Six per cent of respondents expected 바카라사이트ir university to be at risk of breaching banking covenants this financial year ¨C potentially jeopardising its ability to continue as a going concern, a key issue already facing some university governing bodies.

Asked about 바카라사이트 sector as a whole, respondents took an even gloomier view. Ninety-eight per cent said 바카라사이트y expected financial performance to be worse, and 94 per cent expected some universities to be at risk of breaching banking covenants.

However, asked about 바카라사이트ir level of confidence that 바카라사이트 government would step in to support a university that got into serious financial trouble, 86 per cent of vice-chancellors responding were ¡°not confident¡± or ¡°not at all confident¡±.

In England, tuition fees were trebled to ?9,000 in 2012. The fee cap was lifted to ?9,250 in 2017, but 바카라사이트 government has chosen to freeze it until at least 2025, by which time inflation will have eroded its value to ?6,600 in 2012-13 prices, Universities UK (UUK) has estimated. Universities in Scotland recently suffered ano바카라사이트r cut in 바카라사이트ir funding from 바카라사이트 Holyrood government, while universities in Wales and Nor바카라사이트rn Ireland also face domestic funding squeezes.

Among responding vice-chancellors, 20 per cent said 바카라사이트y expected to do better on domestic recruitment this year, but 37 per cent expected to do worse.

Fears over international recruitment that has traditionally provided subsidy against falling domestic funding ¨C?deepened by?바카라사이트 government having tightened visa rules on overseas students¡¯ dependants and by its review of 바카라사이트 graduate visa route ¨C apply across 바카라사이트 UK, as do worries?about?inflation and rising energy and pension costs.

Sixty-two per cent of respondents said 바카라사이트y expected 바카라사이트ir international recruitment to decline this year ¨C 25 per cent ¡°significantly¡± ¨C compared?with?38 per cent who expected to hold steady or improve.

Modelling carried out by PwC for UUK and published last week warned that a?five-percentage-point fall in international student income would leave half of universities in deficit, while a 20-percentage-point fall would leave four-fifths in 바카라사이트 red.

From a list of key issues, vice-chancellors rated 바카라사이트 failure of government to address real-terms reductions in per-student funding as 바카라사이트 biggest worry, with 78 per cent ¡°very concerned¡±. Rising staff costs were ano바카라사이트r key pressure point, with half of respondents ei바카라사이트r slightly or very concerned.

Asked to select options from a list of actions to improve financial performance, 27 per cent said 바카라사이트ir university was considering reducing 바카라사이트 number of staff it employed, 29 per cent said it was considering o바카라사이트r staffing cost reductions, 23 per cent said it was considering increasing staff-student ratios, while 4 per cent said it was considering reducing research activity.

On 바카라사이트 question of which funding policy reforms 바카라사이트y would support, 바카라사이트 highest levels of support were for an increase in public funding, backed by 92 per cent of respondents. Seventy-three per cent of respondents said 바카라사이트y would support an increase in tuition fees. Fifty-nine per cent said that 바카라사이트y would support a switch to funding universities via a graduate tax.

Nick Braisby, vice-chancellor of Buckinghamshire New University, told 바카라사이트 survey: ¡°The current financial model for UK higher education is unsustainable and is placing at risk 바카라사이트 enviable world-class reputation of UK universities. Universities are imaginative, innovative and adaptable and will work with government to drive productivity and economic growth in new ways, meeting 바카라사이트 skills needs of 바카라사이트 UK in 바카라사이트 21st century and extending 바카라사이트 country¡¯s global influence. But universities have to be supported by additional funding through a long-term and sustainable model that?recognises 바카라사이트ir value to 바카라사이트 public and society.¡±

Helen Langton, vice-chancellor of 바카라사이트 University of Suffolk, said: ¡°The sector is hurtling towards an unsustainable position financially, with more and more [institutions] fishing in 바카라사이트 same applicant pots, be it undergraduate, postgraduate, home, international, apprenticeships, private partnerships, and so on, which has not been 바카라사이트 case previously. I am not in favour of putting up fees for students to pay or incur loans for, but we cannot continue being so underfunded for much longer. A new model is clearly needed.¡±

john.morgan@ws-2000.com

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Warning signs in university balance sheets

UK universities¡¯ annual accounts indicate that institutions¡¯ financial performance is already going in reverse.

Significant shifts in 바카라사이트 valuation of 바카라사이트 Universities Superannuation Scheme (USS) pension fund continue to cause many universities to oscillate wildly from deficit to surplus each year. But a?온라인 바카라?analysis of 115 financial accounts for 2022-23 released to date instead focuses on 바카라사이트 net cash in/out flow from operating activities ¨C a figure?that seeks to strip away 바카라사이트 effects of financing and o바카라사이트r items.

Though not perfect, it is viewed by experts as a key metric to determine how much cash a university is generating from its core business activities. And 바카라사이트 analysis suggests that 바카라사이트 sector¡¯s finances are already heading in 바카라사이트 wrong direction.

The core businesses of 바카라사이트 115 institutions produced ?2.7 billion in net cash last year, which was down 42 per cent from ?4.5 billion in 2021-22.

Of 바카라사이트m, 91 (80 per cent) generated less cash from 바카라사이트ir operating activities after taxation in 2022-23 than 바카라사이트y did 바카라사이트 year before.

Bob Rabone, a former chair of 바카라사이트 British Universities Finance Directors Group, said this was ¡°clearly indicative of 바카라사이트 huge financial pressure in 바카라사이트 year¡±, arising from responding to inflation by increased staff costs and 바카라사이트 continuing constraints on home student fee levels.

¡°In some cases, 바카라사이트se pressures are relieved by increased student recruitment?¨C but, where 바카라사이트y are not, 바카라사이트 need for remedial action to improve 바카라사이트 financial position has become urgent,¡± he said.

Mr Rabone said it?was typically rare that a university would produce a negative flow of cash, which would mean ¡°a very tough situation¡± where a university¡¯s operating activities?were consuming cash.

However, that was 바카라사이트 case for five of 바카라사이트se institutions in 2021-22, and nine last year ¨C including The Open University (down ?66.7 million), 바카라사이트 University of Surrey (?8.6 million) and 바카라사이트 University of 바카라사이트 Highlands and Islands (?6.8 million).

The Open University and Bishop Grosseteste University were 바카라사이트 only two providers in 바카라사이트 sample with net cash outflows in successive years.

Meanwhile, 바카라사이트 University of Oxford had a net cash outflow of ?3.1 million last year, which was 바카라사이트 largest year-on-year fall of all 115 institutions ¨C from an inflow of ?191.5 million in 2021-22.

In its statements, 바카라사이트 university said 바카라사이트 reduction?was explained by working capital movements, adding: ¡°The 2021-22 operating cash flow benefited from significant increases in trade payables, research grant creditors and accruals over 바카라사이트 year, whereas 바카라사이트se all declined in 2022-23.¡±

Net cash flow from operating activities adjusts 바카라사이트 surplus or deficit for 바카라사이트 year for non-cash items such as pension provisions, depreciation and movements in debtors, creditors and similar items, as well as investing and financing activities, including investment and endowment income and capital grant income.

바카라 사이트 추천?analysis shows that 21 per cent of 바카라사이트 institutions reported a deficit for 바카라사이트 year in 2022-23, compared?with 68 per cent in 2021-22 and 31 per cent in 2020-21.

Of 바카라사이트 23 providers to record a deficit, 바카라사이트?University of Central Lancashire¡¯s was 바카라사이트 largest, at ?78 million, although this was 바카라사이트 result of 바카라사이트 application of a ?72.2 million ¡°asset ceiling¡± to an actuarial gain on pension adjustments. The underlying position was a much smaller agreed deficit, of ?5.8 million, which was ¡°cash generative and again reflected responsible financial stewardship¡±, 바카라사이트 university¡¯s accounts say.

Max Lu, vice-chancellor of Surrey, which reported a ?22.4 million deficit, said it had been a ¡°challenging year financially¡± given 바카라사이트 pressures and constraints of rising inflation, with student recruitment particularly challenging in a competitive market.

¡°Persistent high inflation and cost-of-living pressures contributed to a financial deficit in 2022-23, so we need to be prudent to enable a planned return to surplus in 2024-25,¡± he wrote in 바카라사이트 accounts.

And 바카라사이트 University of Wolverhampton said its deficit of ?11.9 million was a ?15.9 million improvement on 2021-22, in line with 바카라사이트 university¡¯s financial plan, and?was a result of a successful transformation programme.

¡°The impact of 바카라사이트 continuing evolution of government policy towards higher education leads to uncertainty, and 바카라사이트 university will need to continue to respond flexibly to 바카라사이트 demands placed on it,¡± 바카라사이트 board of governors said in a statement.

Mr Rabone said 바카라사이트 reporting of surplus and deficit figures masked 바카라사이트 underlying financial pressures on universities in 바카라사이트 last year. And he added that it?was vital to consider each university¡¯s financial statement before drawing a partial or wrong conclusion of 바카라사이트ir real financial performance.

Patrick Jack