If a university goes bankrupt, what will you do?Watch
It seems likely that at least one and maybe a number of universities are likely to become financially insolvent if the global lockdown continues for months. What will you do in those circumstances, will the government rescue them? Some universities have borrowed wildly and are very overstretched financially.
Fullofsurprises - Thanks for your Q, I want to reassure you that both myself and the Department of Education recognise that COVID-19
poses significant challenges to the HE sector. We are working closely with Higher Education Providers and OfS, as the regulator, to ensure that we understand the potential financial risks and implications COVID-19 is bringing to bear on the sector, and to keep up-to-date with developments.
The Office for Students has stated that one of its key priorities during the pandemic is to support the financial sustainability of the sector. Providers with concerns about their financial viability or sustainability have been encouraged to contact OfS at the earliest opportunity. In light of Covid-19, the OfS has enhanced its financial sustainability reporting to identify sector and short-term viability risks to individual universities as well as patterns across the sector.
Also it is important that I point out that HM Treasury has announced a wide range of support, including the Coronavirus Job Retention Scheme (CJRS) and more detailed business support packages, including the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business
Interruption Loan Scheme (CLBILS) and COVID Corporate Financing Facility (CCFF).
HE providers that meet the published criteria for CBILS or CLBILS, should approach their bank and begin to apply for the scheme. The Government will set out greater detail on CLBILS, announced on Friday 3 April, later this month. HE providers that do not meet the criteria, i.e. those with turnover exceeding £500m, may wish to explore the CCFF and should liaise with their bank to discuss eligibility. If your bank does not issue commercial paper, UK Finance has provided a list of those banks that are able to assist.