Student decline hits UK unisOverseas Property | Lisa Kao 26 May 2020
The pandemic has hit every industry around the world, including the education sector in Britain. An analysis by the British official independent fiscal watchdog, the Office for Budget Responsibility, estimates that the education sector will be the hardest hit, with a 90 percent reduction in output in the second quarter this year.
The financial impact of Covid-19 on the British education sector is further illustrated by a report from policy and economics consultancy London Economics.
The report, commissioned by the University and College Union, expects there will be 111,000 fewer British and 121,000 fewer international first-year students attending universities in the coming school year, a 24 percent decline compared to the current school year.
The decline in student numbers will result in a decrease in tuition fees and teaching grant income to the tune of approximately 2.5 billion (HK$23.7 billion).
Although the report estimates that the average loss in income per higher education institution is about 20 million (HK$189 million), some institutions are expected to lose more than 100 million.
This is because they rely more on income from international students, who pay significantly higher tuition fees.
If the figures are accurate, an estimated 30,000 university jobs are at risk and a further 32,000 jobs in the wider economy are threatened.
Foreseeing a financial hit, universities have begun seeking ways to cut costs to overcome these hard times. Those in top positions at some universities have taken salary cuts. The principal of King's College London, Edward Byrne, and vice-principals, for example, will be taking a voluntary 30 percent and 10 percent pay cut, starting from August 1, potentially for six months.
Imperial College London and the University of Edinburgh are also implementing salary cuts.
Imperial College London's president Alice Gast and provost Ian Walmsley are each taking a 20 percent pay cut, while members of the president's board are taking a 10 percent pay cut for the coming six months.
At the University of Edinburgh, principal Peter Mathieson is taking a 20 percent pay cut and the senior team is taking a 10 percent cut for six months.
Despite voluntary action taken at the senior level, it is just not enough to make up for the serious financial hit universities are taking.
Other British universities have enacted other measures to cut costs.
Expecting a severe financial loss due to major reduction in international student recruitment and retention, the University of Manchester has stopped nonessential spending, frozen new appointments and vacancies except the most critical posts, paused the start of new projects and planned for staff furloughs.
The University of Roehampton has also implemented measures to reduce spending. Its trade union said the university announced a voluntary severance scheme this month, which will see 15 percent of academic jobs laid off, affecting about 70 positions, and salary cuts for staff who are on scale seven and above. SOAS University of London is planning to restructure, including cutting academic programs, merging departments and cutting staff. However, the university's situation is still worrying.
The Times Higher Education quoted an e-mail from interim director Graham Upton to staff saying the short-term solutions "will not solve our longer-term viability problems."
He added that "the school is structurally unprofitable, having run deficit budgets for the past three years, with a fourth in prospect," and that the university has already sold its Russell Square Terraces for cash.
Noting the difficulties faced by the higher education sector, the British government has allowed institutions to continue to charge undergraduates full annual tuition fees, despite campuses being closed and face-to-face classes being suspended. A cap on the number of British and European Union students each university can enroll in the next academic year has also been set to avoid students concentrating on a few universities.
Even though the sector is calling for a more direct bailout, the minister of state for universities at the department of education, Michelle Donelan, said the proposal is not feasible.
Commenting on the government's measures, the British trade union in further and higher education, the University and College Union, said the government failed to address the sector's needs.
"While it is encouraging that the government appears to have recognized the need to provide support for universities, this package does not deliver the protection or stability that students, staff and the communities they serve so desperately need," said UCU general secretary Jo Grady.
Apart from government support, the union suggested that the education sector work together instead of implementing a dog eat dog approach. "Even with the current unfolding crisis, universities are still itching to compete to recruit students," she said.
"What students and staff really need at the moment is the government to stand behind their universities and for institutions to work cooperatively in the wider interest."