The FT had an article yesterday foretelling the anticipated failure of up to ten UK universities. As they note:
The universities regulator has announced a contract of up to £4mn for professional services companies to manage a potential wave of insolvencies, as the sector faces a looming funding crisis.
They continued, noting that:
The Office for Students (OfS) announced the tender last week after education secretary Bridget Phillipson made it clear that the government will not bail out universities despite warnings from university leaders that several institutions are already on the brink of insolvency.
The tender document, seen by the Financial Times, estimated the total contract value at £2mn to £4mn “based on ten audits in total over the four years”. This would be used to both restructure failing universities and manage “potential market exits”.
So, what is clear is that what we now have is a Labour government planning for the failure of a significant part of the university sector in the UK, about which it is apparently indifferent.
As I have said before, this will blight lives and communities and create significant unemployment and loss of earnings for the UK, but Labour apparently does not care.
I keep asking the question, 'What is Labour for?' and I cannot find an answer.
The possibility that we are now governed by a single transferable party (STP) that has two interchangeable fronts to provide a veneer of democracy in a country that has not noticed it is being conned out of its democracy becomes stronger by the day.
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Don’t you just love the way English capitalism works folks?
Encourage a sector to go for growth.
Make it commit future resources to more and more assets and liabilities.
Then pull the plug, watch it go to shit so that your rich political funders can pick up cheap assets. And blame those you encouraged for their naivety.
How many times have we seen this over the years?
It’s just asset rotation until the whole barrel is hollowed out and nothing of any worth is left.
And the government is just an enabler of it.
Guilty as charged Labour.
Next……………….
Thank you and well said, Richard and PSR.
You’re both on the money.
Let’s start with the people to whom Starmer and Reeves have contracted out their thinking.
#1 Blair (family): UK student lets, which was the foundation of their investment portfolio, is now perhaps a quarter at best. Much of the portfolio is overseas. Euan has invested in vocational training and AI and brought in the Sunak family vehicle. The family may no longer care, at least about the university.
#2 Investment (sic, but really asset strippers) firms advising Labour: As above, but they covet the university buildings that may going in a fire sale.
As countries issue travel advisories about the UK, that won’t help and could hasten the demise of these universities. Some of the money behind the E(&J)DL is also #2.
Richard, with the Tories it was emotionally easy to accuse them of being awful for a variety of reasons. However with Labour’s recent behaviour one feels betrayal is going to happen. I hope they improve but I doubt it. So much needs to be put right & we have elected people with no vision & strategy for improving things beyond not being Tory. They share many of the same ideas as the Tories. I guess the Chancellor’s autumn statement and spring budget will either confirm this feeling or prove us wrong.
What has been done – if anything about allegations of mismanagement in some Universities.
Management should be replaced in that case.
To what are yoiu referring?
Richard,
There have been issues about Vice Chancellors pay for a while, Bath being a case to point.
The behaviour of a number of Universities in lockdown, corralling students into halls and only offering online learning.
If Universities are likley to go bankrupt then there may well be questions to be asked of those that are most vulnerable to bankruptcy why? Clearly in some cases it will be simple misfortune as I am sure you are aware in other cases perhaps less so.
How much would it cost to bail out these Universities? I’ve no idea, but probably chicken feed when compared with the cost of UK support to Ukraine.
My feelings of disenchantment with this new government grow daily. I am already at the point where I look forward to the next 5 years with some dread. Will there be any possibility that there might be an internal revolt to displace Starmer, as Labour left-wingers must be feeling very depressed?
What are the Libdems doing now? The seem to have found somewhere to hide. They have the perfect opportunity to start opposing now that the Tories are pre-occupied with infighting for their new leader.
Sadly, I suspect that the main beneficiaries at the moment will be Reform.
Thank you.
I have heard from a seventy something who was a party member for nearly 60 years that some new MPs, sitting on majorities of a few hundred, if not less, are murmuring after a month. It includes mine, who has links with Blair, Campbell and Miliband ma. Parliamentary assistants are also putting out feelers.
That whopping great majority is not seen as a strength. The median majority for a Labour MP is about 7000 and felt to be vulnerable to a right wing alliance and the Tory base turning out in strength.
My contact would not be surprised if Starmer was ousted within a year or two on current form. Separately, I have heard that Blair and Mandelson and their proxy Streeting would not mind that. They do not think Reeves, who’s Starmer’s confidante, would trouble their machine.
None of that surprises me
‘What is Labour for?’
Nobody wanted to listen or think (as usual) before the general election that Scammer & Co would lie as much as the Tories once in office and sure enough they’re now proclaiming the government can’t invest because there’s a black hole in the government’s finances! “More austerity sir/madam to go with your stale bread and polluted water?”
We discourage overseas students from coming to the UK. We maintain domestic fees at the same level for years and years despite high inflation. We load students with “debt” that cannot all be repaid. Unsurprisingly they end up in financial difficulties.
The government can undoubtedly bail out the universities if it chooses to do so. Just as it chose to bail out the banks in 2007/8.
So, who does it benefit to let them go to the wall? Cui bono?
Quite….
Some student debt has been sold off and it occurs to me that the terms of the debt sale might involve obligations in the event of bankruptcy for either students or institutions. Just a thought.
I doubt it…
The debt is not university linked