The UK government has said it is “not currently persuaded” of the need to create a special administration regime for universities facing insolvency, also ruling out extra support for high pension costs and deferring vice-chancellors’ pay.
In its response to the wide-ranging House of Commons Education Select Committee inquiry into university finances, the government did leave open the possibility that the Office for Students (OfS) could facilitate high levels of borrowing by institutions.
Throughout its 37-page response published on 22 July, the government repeatedly stresses that state intervention should not be “the default response to providers facing financial difficulties” and its approach “is to allow orderly market exit where appropriate”.
The committee had recommended that ministers consider creating a special administration regime for universities, mirroring one that exists for the further education sector.
This could “include ensuring teach-out processes for current students, protecting the sufficiency of sector-critical courses and allowing for mitigations to avoid geographical cold-spots”, the committee said after it heard repeated concerns that it was not clear what would happen should an institution go bust.
