Some universities will go bust

[GinForBreakfast]

Reported in the Times today. It must be so worrying for students joining or returning in September/October.

My question is around the regulator, who knows where the issues are. What should they be telling students and when? It seems cruel, especially to young people, to withhold information. It has financial implications as well - people moving, paying deposits etc.

Top notch is not what have been happening. They have lower requirements for foreign students. The Tories could never do anything right as the mob would have violently attacked them all the time. Labour would get away with a lot more and tackled issues that would be easy to sort out by not being Tories.
Why are universities struggling in the first place?

How many people were going 100 years ago? Do you know how many people attend UK universities nowadays? Not even that how many people now getting welfare state and pensions. How many people contributing? How Blair and the top up credits for minimal income affected the whole pot? How much we spend in housing asylum seekers and refugees? Those decisions have consequences.

This is the lamest justification for government inaction I've ever read! When a government with a majority wants to act, they act. A government is responsible for its record.

And when do you think we should have called “Halt” on research?
I don't think that anybody is saying that.
The problem is that we went from approx 20 Universities to over 160 Universities. You can't tell me that every single one of them is doing top notch research in every single subject they cover. Just as we have too many students, we have too many staff desperately trying to pretend that they have something novel to sell us. And it's not as if the staff enjoy the precarious game of lack of tenure and of chasing the next grant.

Hopefully Labour does more than blaming Tories then. However, it was not government inaction but wherever. Everything was always opposed when the Tories were in. Any options given and even lockdowns were Labour asked for even more of it.

You are so wide of the mark here, I think it is unlikely you work in the sector. Every university in the country is currently in a programme of efficiencies. Those that need to include redundancies in their efficiencies have the biggest financial deficits.

You are completely wrong also about those being in trouble being the second universities in their cities - this is demonstrably incorrect.

I think the main difference is that advertising and banking produce enough money directly that they can "waste" huge amounts without impact. When an enterprise wastes money but doesn't actually generate profit (see universities, NHS, local authorities) that's where the problems arise as taxpayers are directly funding that wastage.

@usernamealreadytaken The university sector adds £71 billion gross value added to the economy annually.

A lot of ignorance on here. There is no shortage of UK university students - the numbers continue to increase year on year. It is that the funding for this increased volume of students has fallen dramatically in real terms. So university places are needed, we are not talking about a dying sector - it is thriving. The funding model needs fixing.

My university employs over 4,000 people. Our student intake is huge (>30,000). The idea that universities should close because you think there are too many is uninformed and dangerous. There are plenty of students (though fees are too low). Any other sector employing this many people would rightly be bailed out by government. Universities are asking for the funding model to be fixed to reflect inflation, that's all.

That would be job losses in the tens of thousands, for one thing.

Looking under the hood is very common parlance in the UK. You don't sound like a particularly agile-minded person, and that stale commitment to the status quo is not what the university sector needs!

Yes, it’s a bizarre sector where they’re basically told they are private businesses and to sort their own financial issues out. But the govt tell them how much they can charge…..and expect them to be happy with charging a fee which makes a loss for the majority of students. How many other private businesses have this issue? None! Sadly either fees need to increase or funding needs a complete overhaul.

The alternative (which is probably more likely) is that some universities will go bust. Maybe that will sort the sector out as the remaining universities will hopefully be full and the increasingly limited number of overseas students will be spread more thickly round. But this depends on how many overseas students come which is out of control of the universities. It will also mean there will be less places for U.K. students. At the moment it’s a bums on seats mentality for many courses, at least it is from what I’m seeing. But if there are a smaller number of universities left there will still be the issue of losing money on home students.

Actually that isn’t strictly true. Yes ultimately but not all immediately.

if five universities closed and mergers resulted there would of course be some job losses because central service positions could in some cases be removed. However, now that there is no retirement date there are professors approaching 80 pulling salaries of £90k plus who would retire, there are lecturers on research contracts who haven’t produced research for five years etc. these people do actually need to move on. But then the universities that remain would also need some additional staff due to the increased student numbers. So the losses wouldn’t be as great as you would initially think. Of course there would be some but markets have to adjust, you can’t just keep a failing system because it keeps people in work.

what we would be left with is fewer universities but those that remain would fill their spaces. That isn’t the only thing needed for the system to be fixed because we make a loss on each Uk student but it’s a start and it’s certainly part of the reason why we make a loss on each Uk student.

fewer academic jobs means salaries adjust slightly which I’m afraid to say is needed at the very top end (not in the middle necessarily where the bulk are paid circa £50-£60k). Certainly VC salaries are way too high.

student fees need to be increased and that in itself would cause some reduction in numbers over the course of a few years but ultimately we need to shift to a culture of more students going to local universities and living at home in years 2&3. This would reduce their overall living costs and offset the higher tuition fees.

there are all sorts of additional things that would improve the sector. All of them require some short term pain. The situation we have at the moment was artificially created for political reasons and we are heading towards the perfect storm.

The reason that universities are financially at risk is because they are expected to run as business but can’t control their prices in the way that businesses can. It is not that there are failing subjects or anything like that.

Universities have a few main income streams which have all been cut.
Home Tuition fees- this used to fully cover the cost of educating a student and in areas with low teaching costs like English actually made a profit for the university. Now universities make a loss on every home student ( before tution fees the government gave the universities money to cover tuition).
International Tuition Fees- this still makes a profit they can charge what they like but the government have put restrictions in visas for the students so fewer people are coming.
Research grants- funding for research is a huge income source for universities but they can’t access European funding since Brexit.

If universities were able to access adequate funding for home students they would be alright. This is not just the cost of teaching the course but things like student support. Not every student will access the counselling services but things like that need to be there.

I don’t understand the problem.

A small number of unis close, others will likely take any displaced students.

Job loses?
Impact on local economy?

If my university was to close the impact on the town would be catastrophic.

Re international students. One example is the store Harvey Nichols which would suffer because overseas students have the money to shop there.

I know it's an odd example but it shows that overseas students have serious spending power from luxury goods to takeaways of food, coffees, Ubers daily.

@DoorPath Have you had a sense of humour bypass! No - that’s not a standard term where I have worked. Look under the bonnet is! Hence I queried it. I’m not American and I asked if the author was. Just shows how insular academics can be! Sometime wise said it was an academic hood.

Every single industry from coal mining to yacht building thinks they are needed. There’s some demand for uni but look at clearing lists. They are huge. Unis have low tariffs in some cases and lower them even further to get bums on seats.

Unis are not businesses in the truest sense. They operate in a very different way. In effect just shedding a few courses won’t help. It’s a revised structure that’s needed. Some lower tariff ones absolutely should merge and alter courses from degrees. I agree that proliferation of dubious “research” is purely self serving.

The reason that universities are financially at risk is because they are expected to run as business but can’t control their prices in the way that businesses can. It is not that there are failing subjects or anything like that.

This.

We are still under over-bureaucratic levels of State surveillance.

TEF and REF cost an enormous amount and don't really tell the government or potential students anything that couldn't be worked out from other metrics (eg. REF roughly maps onto levels of funding from the UK research councils).

The NSS is a deeply flawed non-measurement of teaching. Various meta-studies (done in several countries outside the UK) demonstrate that surveys of 'teaching quality" are actually much better indices of students' racist and sexist biases.

And so on.

UK research happening in universities is a huge contributor to our national resilience and productivity. In terms of outcomes for cash, the UK punches well above its weight in research terms internationally.

But hey, who listens to experts nowadays?

Research grants- funding for research is a huge income source for universities but they can’t access European funding since Brexit.

We're back in Horizon Europe, thank goodness. And we make a "profit" - UK researchers win more from HorizonEurope than the UK contributes ...

But UKRI research grants run on an 80% funding model - they fund 80% of the budgeted costs, and the research institution finds the other 20%. So the things you can't compromise or save on, (or subsidise from your own salary ...) such as salaries for research assistants, plus all the on-costs associated with employing someone, are paid in full, and other costs are cut back in reality.

Most academics work many more hours than the paid 37.5 per week. There is huge unpaid overtime of teaching staff which subsidises universities, and a lot of us pay for conference attendance and other smaller research costs from our own pockets. Even if you all decide that universities shouldn't do research (stupidest Idea I've heard yet) we go to conferences to hear the latest research to teach our undergrads. Oh, unless you parents would all like your DC to be taught stuff 30 years out of date?

I agree that proliferation of dubious “research” is purely self serving.

What dubious research? Universities don't randomly decide to research something weird and wonderful - they're paid to do so. If you think it's dubious - blame those that funded it, not the universities. I'd like examples (including the funder) of this dubious research though.

And who said there were only 20 universities compared to 160 now? When were there only 20 - maybe in the late 1800s. I think we've moved on from then!

Many, many decades ago, about 5% of the population went to university (from memory, can't find the source of that figure). They were either extremely posh and wealthy, or more likely they were the most academic and intelligent in society and were nearly all destined to stay in academia and research.

Going to uni as a route into a 'good' job was virtually unheard of. The professions had their own routes into professional qualifications, and trades had apprenticeship systems.
University was about being "academic" in the old sense of the word, not about job training.

We need to get back to this model.

We need to get back to this model.
What? A model where only the wealthy went to university?
Yeah, that sounds like an excellent idea 🙄

We need to get back to this model.

Read the full thread. There are several reasons why this would be a terrible idea.

Well, I don't know, @ElaineMBenes - it would make it far easier for the next 3 generations of my family.

My family would be fine. We've always gone to university (thanks to our trust funds) and who cares about the middle classes, and certainly not the working classes - they're all pretty inbred to be stupid anyway.

Fees don't bother us, and universities would be nice safe places for rich white boys again. I can't see what's wrong with that, can you?

The uni employs 5000 people or thereabouts and has approx 20000 students

That is insane. Only 4 student for each staff member! No wonder they are going bust. They need to radically re-think their staffing structure.
I suspect that in addition to core functions such as HR, IT and Finance, plus basic Admin, there are a lot of high-salary middle-manager-type jobs that are pointless.
Does the 5000 staff include researchers and lab assistants? Research should be financially separated from Undergraduate provision.
What is the ratio of teaching hours to non-teaching hours across all staff?

( I don't expect you to know the answer, but these are the questions to ask).