Higher Education: Finance

Department for Education written question – answered on 17th September 2020.

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Photo of Baroness Ritchie of Downpatrick Baroness Ritchie of Downpatrick Non-affiliated

To ask Her Majesty's Government what assessment they have made of the financial effect of the decision of examination bodies in England to allow predicted grades as a basis for students’ applications on universities and the higher education sector.

Photo of Lord Parkinson of Whitley Bay Lord Parkinson of Whitley Bay Lord in Waiting (HM Household) (Whip)

My hon. Friend, the Minister of State for Universities, and departmental officials have been working closely with the higher education sector, through the Higher Education Taskforce, to review developments in the admissions cycle taking place in the current complex circumstances, including the reliance on centre-assessment grades. The taskforce continues to examine patterns of admissions, with expert input and information from the Universities and Colleges Admissions Service. This ongoing analysis and dialogue with the sector includes consideration of financial implications of the way in which the admissions cycle is operating in practice. My hon. Friend, the Minister of State for Universities, will continue to listen to the views raised through the taskforce.

The government understands that the sector is facing significant financial challenges and we are working closely with the sector, with the Office for Students (OfS), and across the government to understand these challenges. We will work closely with any provider affected. Providers with concerns about their financial viability or sustainability have been encouraged to contact the OfS at the earliest opportunity. They are now also able and encouraged to contact the Department for Education’s Restructuring Unit directly.

The government has already put a number of financial support measures in place. We have announced a package of measures which combines different ways to give further support to providers at this time of financial pressure. We have pulled forward an estimated £2.6 billion worth of forecast tuition fee payments to ease cashflow pressure this autumn. We are also bringing forward quality-related research funding for higher education providers in England in the current academic year by £100 million.

To ensure that providers are able to offer increased capacity, the government will provide additional grant funding to support this provision which is vital to our economy and public services, as well as providing additional teaching grant funding to increase capacity in science, technology, engineering, and mathematics and other high-cost subjects. The OfS will consult the sector on the details of how the allocations are made in due course.

Providers will also be eligible to bid for a share of up to £10 million of funding to support capital expenditure. This funding will be used to support the infrastructure required to accommodate additional students recruited as a result of the changes to policy on A level grades. The fund will be administered by the OfS, and providers will be eligible to bid for projects which support expansion in 2020/21.

The government has also announced a further package of support to universities and other research organisations to enable them to continue their research and innovation activities. This includes £280 million of taxpayer funding as well as a package of low-interest loans with long pay-back periods, supplemented by a small amount of government grants. In sharing responsibility for the future of science and research with our world-leading university system, from the autumn the government will cover up to 80% of a university’s income losses from international students for the academic year 2020/21, up to the value of their non-publicly funded research activity.

My right hon. Friend, the Secretary of State for Education, also announced further information about the Higher Education Restructuring Regime on 16 July. This may 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 mitigate the risks of financial failure have not proved sufficient.

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