Several UK universities are in such financial difficulties that they are close to bankruptcy, former government adviser warns

  • Nick Hillman, head of higher education think-tank, made warning last night
  • Claimed insiders said some universities are closer to wall than ever before 
  • Possible  solutions could be mergers or takeovers by stronger institutions

Several universities are in such financial difficulties that they are ‘close to the wall’, a former government adviser warned last night.

Some are experiencing the worst financial issues in living memory and it was ‘not beyond the realms of possibility’ that one could face bankruptcy, Nick Hillman said.

Experts have told how many universities are struggling to recruit enough students amid a surplus of places caused by the expansion of popular institutions. Every empty seat means a loss of up to £9,250 a year in tuition fee income.

Mr Hillman, who worked for David Willetts when he was Tory universities minister, revealed insiders had told him that a number were in grave trouble. It is unlikely students would be told of any problems unless closure became imminent, he said.

Mr Hillman added: ‘The rumours of a small number of universities being in financial difficulty are too persistent to ignore. No UK university has ever gone bust, so it would be a major scandal if it were to happen. Talking privately to people who advise universities, they will tell you ... there are some that are much, much closer to the wall than they’ve probably been at any point in living memory.’

Several universities are in such financial difficulties that they are ‘close to the wall’, former government adviser Nick Hillman warned last night

Several universities are in such financial difficulties that they are ‘close to the wall’, former government adviser Nick Hillman warned last night

However, he said that while ministers have said there will be no bailouts, it is ‘implausible’ that any large university would just be allowed to ‘shut up shop’.

Possible solutions could be mergers or takeovers by stronger institutions.

Mr Hillman is head of the Higher Education Policy Institute think-tank, which publishes research today on students’ thoughts about universities’ finances.

The poll of 1,000 undergraduates found 83 per cent thought their institution was strong financially – but 97 per cent would want to know if it hit financial problems.

All universities must submit proof to the Office for Students (OfS) regulator that they are ‘financially viable’ for three years and ‘financially sustainable’ for five.

Nicola Dandridge, chief executive of the OfS, said: ‘We do not have significant or widespread concerns about the financial viability or sustainability of the sector.’ 

Mr Hillman is head of the Higher Education Policy Institute think-tank, pictured, which publishes research today on students’ thoughts about universities’ finances

Mr Hillman is head of the Higher Education Policy Institute think-tank, pictured, which publishes research today on students’ thoughts about universities’ finances

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