Help students more to win £2 billion bailout, says ex-HE minister

Universities stand a better chance of securing a £2 billion rescue package if they focus on what more they will be doing to help newly qualified graduates in a coronavirus recession, rather than stressing their own financial difficulties, former universities minister Lord Willetts has advised.

With the Treasury reportedly resistant to calls from Universities UK (UUK) for a one-off sector bailout, despite warnings that some institutions might collapse without government support, Lord Willetts said a different approach was required to “unblock” the impasse.

Speaking in an online debate with former higher education ministers Jo Johnson and Chris Skidmore on 23 April, Lord Willetts said “one way…to get more sympathy from the Treasury is to look at it from the point of view of young people and students”.

“The job market in the UK and other advanced Western economies is going to be disastrous this summer – if you are a school- or college-leaver, it will be terrible,” explained Lord Willetts, who predicted that student numbers would rise as many graduates with a disrupted final year might want to do a master’s degree.

“Universities, in partnership with further education colleges, should pitch that they can do more in a time of crisis and need extra resources to do it,” argued Lord Willetts, who advised a “pitch in terms of [students’] interests, not simply as universities as institutions”. He proposed that universities offer a six-month course to those about to graduate, which included internships with local businesses.

“I would hope the government does provide some financial help, but the Treasury is playing hardball – they will be asking telling questions about what this money is for, why institutions need it and what, in turn, universities will do to raise their game,” said Lord Willetts.

Treasury officials might also be persuaded to advance a bailout if universities could demonstrate their role in creating “smart partnerships” with industry to leverage private research and development spending, said Lord Willetts, noting that increasing this investment will be crucial in helping the government reach its goal of spending 2.4 per cent of gross domestic product on research by 2027.

“I suspect at the end of this year, as part of a terrible economic picture, we will be seeing low levels of business investment and R&D,” Lord Willetts said.

He continued: “If universities and other publicly funded agencies are smart and show how, with public funding for R&D, they can bring alongside and boost private spending – that is an argument that will particularly strike home with the Treasury.”

Mr Skidmore agreed that universities should receive financial support, but he was concerned that the UUK plan “reverted back to a golden triangle narrative” that sought to ensure that older universities “disproportionately benefit from that package”.

“I would hope the government is taking time to work out an equitable mechanism by which universities can stay open, because the consequences, as the London Economics report has shown, is potentially a £6 billion loss to the economy,” said Mr Skidmore.

He also raised concerns that Russell Group universities might “suck up places and destabilise other places that are the ones training nurses who are fighting coronavirus”.

“Those are also the institutions with large numbers of vocational courses and those are predominantly the institutions when it comes to [promoting] social mobility,” he added.

Mr Johnson also argued in favour of a bailout, although he noted that “no sector should be frozen in aspic for eternity – sectors must be ready to adjust with changing circumstances”.

As the coronavirus crisis was, however, a “unique exogenous shock to the system”, said Mr Johnson, “it is right that we put our concerns about [how] market forces operate to one side and help the sector adjust to what is a unique set of circumstances…to prevent the disorderly collapse of institutions that are of extraordinary importance to the country”.

jack.grove@timeshighereducation.com

Watch the full debate