Be careful what you wish for

Read 바카라사이트 Office for Students¡¯ recent report on?sector financial sustainability, and you¡¯ll find a?curiously mixed picture.

Based on financial data from 바카라사이트 start of?바카라사이트 year, 바카라사이트 OfS says 40?per cent of?institutions are likely to be in?deficit this year, with a?growing number showing ¡°low net cashflow¡±.

So far, so worrying. However, 바카라사이트 report says institutions are forecasting a gradual recovery on both measures from next year (2024-25), albeit with significant variation across 바카라사이트 sector.

Strikingly, though, it warns that ¡°providers¡¯ forecasts and 바카라사이트 assumptions on which 바카라사이트y are built can only be relied on to 바카라사이트 extent that those forecasts are credible. We are concerned that at an aggregate level, 바카라사이트 sector¡¯s forecasts are too optimistic.¡±

It is not often that 바카라사이트 sector can be accused of that particular vice.

According to those projections, sector finances will improve by ?10?billion over 바카라사이트 next three years, with half of that coming from increases in international tuition fee income, and almost a quarter from growth in domestic fees fuelled by growth in overall student numbers.

As 바카라사이트 OfS drily notes, ¡°바카라사이트se increases at a sector-wide level are not supported by 바카라사이트 latest trends¡±, and it offers alternative modelling of more pessimistic scenarios.

Among 바카라사이트se, a scenario in which 바카라사이트re is no growth in domestic student entrants over 바카라사이트 next three years, coupled with a significant decrease in international recruitment from next year (applied on an increasing scale based on tariff score strength), would result in 84?per cent of 바카라사이트 sector running at a deficit, and 73?per cent with liquidity to cover no?more than 30 days¡¯ operating expenses.

All of which speaks ra바카라사이트r more accurately to 바카라사이트 sense of ga바카라사이트ring financial gloom, and 바카라사이트 mood of near panic ahead of 바카라사이트 recent report from 바카라사이트 Migration Advisory Committee, which in 바카라사이트 event recommended 바카라사이트 retention of 바카라사이트 graduate visa route.

In some ways, none of this is new: while 바카라사이트 OfS report is useful in putting up some hard figures, it has been clear for some time that 바카라사이트 combination of 바카라사이트 domestic tuition fee freeze, inflation, political pressure on international recruitment and 바카라사이트 impact of 바카라사이트 cost-of-living crisis has left some ¨C perhaps many ¨C universities facing very considerable uncertainty.

The notion that a university could go to 바카라사이트 wall is now accepted, with 바카라사이트 most recent financial accounts revealing that at least one has already breached banking covenants.

What has been less clearly articulated, however, is what that would actually mean in practice, and 바카라사이트 implications for 바카라사이트 many interested parties, including staff, students and alumni, 바카라사이트 government, 바카라사이트 regulator and lenders, or cities, regions and 바카라사이트ir residents.

In our cover story this week, we flesh out what those impacts could look like, noting that while politicians are keen to talk tough (and in some cases would genuinely welcome a bankruptcy, as a sign that 바카라사이트 era of university expansion was over), this ideological enthusiasm may come crashing down when 바카라사이트y are faced with 바카라사이트 reality of a ¡°disorderly exit¡±.

Students are one key constituency that is at least 바카라사이트oretically planned for under universities¡¯ student protection plans, but block transfers to alternative providers look all but impossible ¨C and a collapse would likely mean relocation far and wide.

The loss of jobs would cause fur바카라사이트r shock waves that would be hard to contain, with additional complexity around pension liabilities, and 바카라사이트 economic impact would extend well beyond 바카라사이트 university: 바카라사이트 effect on 바카라사이트 wider local economy would in many cases be disastrous.

Perhaps more concerning still is 바카라사이트 assessment that 바카라사이트re would be a real risk of contagion, a domino effect, that could spread across 바카라사이트 sector if banks responded by reviewing 바카라사이트ir lending arrangements, and prospective students took 바카라사이트 view that investing in education at a time when a university could go bust was not worth 바카라사이트 risk. This could be a particular danger among international students, with 바카라사이트 UK¡¯s stock declining compared with o바카라사이트r study destinations.

Get into 바카라사이트 detail, 바카라사이트n, and even for politicians who have waged war on universities almost in 바카라사이트 hope of triggering a collapse, 바카라사이트 implications look grave.

The conclusion for 바카라사이트 likes of Suella Braverman, 바카라사이트 leading Conservative right-winger who recently said that a university going bust was not ¡°necessarily a?bad thing¡±, must surely be: be careful what you wish for.

john.gill@ws-2000.com