PARLIAMENTARY WRITTEN QUESTION
Universities: Coronavirus (10 July 2020)

To ask the Secretary of State for Education, what assessment he has made of the implications for his policies of the Institute for Fiscal Studies report entitled, Will universities need a bailout to survive the COVID-19 crisis, published 6 July 2020; and if he will make a statement.

Asked by:
Ed Davey (Liberal Democrat)

The government recognises that the COVID-19 outbreak has brought significant financial challenges to the higher education (HE) sector, with losses of income across teaching, research, commercial and other activities, as published in the Institute for Fiscal Studies report on 6 July 2020. The government has already provided significant support to help providers through the financial challenges that COVID-19 has brought upon the sector. The HE package that we announced on 4 May, with its reprofiling of public funding and measures on admissions, has acted to stabilise the situation in England.

In June, we announced further UK-wide support in the form of the Department for Business, Energy and Industrial Strategy’s research stabilisation package. Alongside this, eligible HE providers can apply for the range of business support measures that the government has put in place to support our whole economy.

We recognise, however, that a high level of uncertainty remains around the scale of problems that HE providers, as a whole and individually, may face in the coming academic year. We need to be able to intervene, where there is a case to do so, to support providers whose future is at risk because of the financial impacts of COVID-19.

My right hon. Friend, the Secretary of State for Education, announced further information about the higher education restructuring regime on 16 July. This will be deployed as a last resort, if a decision has been made to support a provider in England, when other steps to preserve a provider’s viability and to mitigate the risks of market exit have not proved sufficient. The overarching objectives that will guide the department’s assessment of cases will be protecting the welfare of current students, preserving the sector’s internationally outstanding science base and supporting the role that higher education providers play in regional and local economies through the provision of high quality courses aligned with economic and societal needs.

Financial support in the form of repayable loans will only be offered as a last resort measure, and with specific conditions, such as tackling low quality courses and reducing excessive Vice-Chancellor pay.

Details on the higher education restructuring regime can be found at: https://www.gov.uk/government/publications/higher-education-restructuring-regime.

Answered by:
Vicky Ford (Conservative)
20 July 2020