Call for support for UK universities amid 'bankruptcy' fears as study shows economic impact of Yorkshire's settings

The University and College Union (UCU), which commissioned the study, called for a “clear and coherent” plan to support educational capacity and prevent thousands of job losses as many universities struggle financially.

The union started its Fund the Future campaign last month, calling on the Government to provide financial guarantees to stop thousands of staff losing their jobs at a time when education would be needed to drive the recovery from the virus pandemic.

The study details the billions generated for local economies by university spending and staffing. It warns of the wider “economic shock” on towns and cities if any university was to struggle as a result of financial instability.

UCU general secretary Jo Grady said: “Allowing universities to fail because of the health crisis will mean the economies of many of our towns and cities will also fail.

“Universities are vital in providing educational opportunities, but they also have a huge impact in creating local jobs, supporting local businesses, and attracting business to the area.”

Universities are often among the largest local employers, the analysis by Hatch Regeneris for the UCU shows, supporting around one additional job for every person employed.

The report examined the impact of universities in Yorkshire and Humber. In Leeds and Sheffield, it found universities indirectly employ more than 37,000 people, contributing more than £2bn to the area’s economy, while Bradford and Hull generate a further £490m in economic spend and support over 6,000 jobs.

Furthermore, in the wake of the Government’s pledge to ‘level up’ communities, the analysis highlights the relatively high wages such skilled jobs can bring.

The review analysed 74 studies and modelled a further 90 to produce a detailed picture of universities’ role in the nation’s economy.

Ms Grady said: “With every university job leading to another job in the local area, it is now vital that instead of talking our universities down the Government protects them.”

The nation’s higher education sector faces “significant” financial threat, a report from the Institute for Fiscal Studies found earlier this month, putting several universities at risk of insolvency.

The sector, facing potential falls in student enrolment, particularly with international students, alongside a drop in income over several months, could see long-term losses of around £11bn, it found.

While many universities are “well placed to shoulder the losses”, the study warned, it could result in severe problems for more than a dozen individual institutions.

Government response

A Department for Education spokesperson said: “Universities drive innovation, economic growth and act as a cultural hub in our communities. We understand this is a challenging time which is why we have introduced a package of measures to stabilise the sector, help universities manage their finances and safeguard students.

“We have confirmed universities’ eligibility to apply for Government-backed packages worth at least £700m according to Office for Students estimates, along with bringing forward £2.6bn worth of tuition fee payments.

“To stabilise the university research base, Government is bringing forward £100m of quality-related research funding and investing £280 million into grant extensions for research impacted by coronavirus.

“For providers which are at risk of closure as a result of Covid-19, we will assess the case for restructuring support where there is a case to do so, including looking at the impact on regional businesses, jobs and local growth.”

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