Finances at England’s universities and other higher education
providers largely remain sound despite the early impact of the
coronavirus (COVID-19) pandemic, new analysis from the Office for
Students (OfS) has found. However, there is significant variation
in the position of different providers.
The report finds that strong cash balances, increased but
sustainable borrowing including through government-backed loans,
and the fall in income from international students’ fees being
less than feared, have combined to leave the sector in a
reasonably stable financial position. The OfS’s analysis
concludes that although there is currently a low chance of a
significant number of unplanned closures of universities,
colleges or other providers, there remain considerable
uncertainties in the future.
The analysis is based on data returned to the OfS this October.
In the return, universities forecast their financial performance
and position in the financial years ended in 2020 (2019-20) and
2021 (2020-21), relative to the complete year prior to the
coronavirus pandemic (2018-19). It provides the first opportunity
to analyse the impact of the pandemic on English higher
education.
The report finds:
- The aggregate data shows that the sector is expecting to
report broadly similar levels of income of £35 billion across all
three years, albeit with an expected decline in 2020-21 to below
the levels achieved in 2018-19.
- In 2019-20 total higher education course fees were reported
at £18.5 billion, an increase of 7.2 per cent compared with
2018-19 (£17.2 billion). Higher education providers have forecast
that fee income will fall by 1.7 per cent in 2020-21, although
this would still be above 2018-19 levels.
- Total Non-EU (overseas) tuition fee income was reported at
£6.0 billion in 2019-20, an increase of 16.4 per cent compared
with 2018-19 (£5.2 billion) - consistent with strong growth in
overseas fees in recent years. At an aggregate level, providers
anticipate this to decrease by 10.4 per cent in 2020-21 to £5.4
billion.
- At the end of 2019-20, aggregate sector borrowing was £13.7
billion (equivalent to 38.4 per cent of income), a rise of £0.7
billion compared to 2018-19. Forecasts show that the sector is
projecting aggregate borrowing to continue to rise to £14.2
billion by the end of 2020-21 (40.6 per cent of income). This is
a slower increase in borrowing than in previous years.
Commenting, Nicola Dandridge, chief executive of the Office for
Students, said:
‘The profound impact of the pandemic has caused significant
disruption to students and universities and other higher
education providers in the last nine months. However, at this
stage, the effects of coronavirus on university finances are not
as severe as was first feared, though there is significant
variation between different universities.
‘There are many reasons for this relatively positive picture.
Universities entered the pandemic in reasonably robust shape.
England continues to be a popular destination for international
students. And universities have been able to access significant
support from the government, including via access to
government-backed loans. All of this means that English higher
education finds itself in reasonable financial shape, and the
grave predictions of dozens of university closures have not
materialised.
‘There are a number of uncertainties which will continue to
affect finances both now and into the future, not least the fact
that it is still not clear what the overall impact of the
pandemic will be. Where universities have immediate concerns
about their finances, they must let us know straight away. The
OfS will work constructively with any university in financial
difficulties, with our overarching priority being to protect the
interests of students. At this point in time, though, we believe
that the likelihood of significant numbers of universities or
other higher education providers failing is low.’
