Fears of university closures after removal of safety net

Some English universities may be in danger of collapse, experts warn, as numbers of young students enrolling at several institutions have dropped alarmingly in the new competitive education “market”.

Figures released by Ucas, the universities admissions service, last week reveal that the number of 18-year-olds enrolling at London Metropolitan University, the University of Cumbria, Kingston University and the University of Wolverhampton have shrunk every year, with major losses over the past five years.

However, with more universities in a potentially dangerous position than ever before, fear is growing that there is no government body with a clear responsibility to predict or prevent a university failure.

Prof Colin Riordan, the vice-chancellor of Cardiff University, a member of the elite Russell Group, told Education Guardian: “To my knowledge we haven’t been in a position in living memory where it seems likely that established universities could find themselves in an unsustainable position and having no option but to close.”

Riordan says that the Office for Students, the new regulator for English universities, seems to have been set up with a view that it should be possible for universities to go under. The only clear stipulation in its terms is that all universities should have a pre-planned “exit strategy” for looking after their students in the event of closure.

Riordan says: “The Higher Education Funding Council for England [the predecessor of the OfS] had a definite role in averting failure. It wasn’t just a matter of bailing institutions out, it was about ongoing scrutiny and oversight and becoming involved in the day-to-day affairs of the university if necessary. All those safeguards have now gone in England. The Office for Students has set its stall out very clearly and it is not there to ensure the sector’s health.”

He says letting a university go bust would have serious repercussions, especially in a depressed area. “As well as possibly being the main employer, the university may be the main route for the local population to advance themselves. If people want to get a better career or make some progress in life they may find it pretty difficult with their university gone.”

Since the cap was removed on how many students each university could recruit, institutions have faced unprecedented competition, with popular universities, including Bristol, UCL, Exeter and Surrey expanding. Commentators say this has had a knock-on effect, with middle-ranking universities sucking up some students who before might have accepted places at “lower tariff” institutions.

According to the Ucas data, London Metropolitan University has lost the most, with acceptances from 18-year-old UK students down 15% last year compared with 2016, and 53% since 2012. However, a spokesperson for the university says that despite a difficult history – the university’s financial problems were the focus of global media attention in 2012 when the Home Office revoked its licence – it is in a “strong position” financially. She says 18-year-olds are not its major focus, as more than half of students are over 21. “London Met’s responsibility is to continue to meet the human capital needs of London as they change over time.”

The University of Cumbria has also lost more than a third of its young recruits – down 36% since 2012. In common with other universities, its numbers have been dropping more each year, with a 5% fall in 2017. Two of Cumbria’s key training areas are nursing and teaching, and it has been hit by the national fall in applications in both areas.

Its vice-chancellor, Julie Mennell, says, however, that Cumbria has met its student targets for this year and has a new strategic plan. “We are well placed to respond to both the challenges and opportunities.”

Kingston University has had similar losses – down a further 7% on acceptances by 18-year-olds last year, and 30% in the last five years. The University of Wolverhampton was also down 7% in 2017, and 23% since 2012. All of these universities point out that many of their students are older, and are therefore not included in the Ucas statistics.

A spokesperson for Kingston says that all universities are feeling the pressure of a demographic dip in 18-year-olds. She adds that the university reduced its recruitment target last year in line with its “refocused course portfolio” and is still a “popular choice”.

Anthea Gregory, the deputy vice-chancellor at Wolverhampton, says: “The Black Country Conurbation has a high proportion of adults without any qualifications and it is our mission and role to enhance people’s life chances and upskill the workforce.” The university is doing well, she says, on recruiting part-time students, and with its degree apprenticeship programmes.

Mike Molesworth, the principal teaching fellow in Southampton University’s business school and author of a book on the student consumer, says: “The point of recent policy changes is to get universities to act more like businesses, with a shift in policy emphasis from protecting the university as a social good to protecting the student as a paying customer. Although it’s unclear how it would ever be in a student’s interest for a university to fail, market logic suggests that under-performing institutions may struggle, then contract, be taken over, or even fail.”

But Tim Fanning, the associate director at Regeneris, an economic development consultancy that works closely with universities, says that losing a university in a less prosperous area could deliver “a nasty economic shock”. He says universities often employ thousands of people, “far more than just the academics”, and local communities rely on spending by students, staff, visitors and the university itself.

“Would Theresa May make the case that a failed university is unfortunate for those concerned, but ultimately all part of the market helping to drive up overall quality and value for money?” he asks.