Financial plight of universities in Wales is beyond devolved administration budgets

THE UK’s Office for Budget Responsibility (OBR) has analysed which sectors of the economy will be hardest hit by coronavirus crisis. Forecasting an overall drop of 35% for the whole UK economy it identifies that Education (and particularly the University sector) will be the hardest hit with a 90% drop in output. Hotels and food services (85%) and construction (70%) are the next two.

Hundreds of staff on precarious contracts have already been dismissed by their employers, while international students from China and other countries are cancelling enrolments.

There are similar concerns in Wales with a University and College Union report estimating that first-year student numbers could fall by 13,000 in Wales, including 7,000 fewer UK students and more than 5,500 fewer international students, including EU students.

The union has estimated that Welsh universities could face almost a £100m drop in income in the academic year and the impact on income could place at risk some 1,200 of the 23,000 employed in Wales’s universities.

An Union is appealing to the Welsh government for help saying ‘’we expect the Welsh Government to work closely with institutions and Hefcw [the Higher Education Funding Council for Wales] to mitigate the impacts of this crisis on staff and students and ensure no institution is allowed to go to the wall.”

However, the Welsh Government Education Minister Kirsty Williams has responded indicating that the scale of financial support that may be needed by universities in Wales as a result of coronavirus “is beyond devolved administration budgets”.

The Welsh Government in a statement says that universities should look to support from the UK Government and make use of UK-wide job and business financial support.

“We recognise that the financial impact of the crisis on universities is substantial, and that further support from government may be required after institutions have done all they can to stabilise their financial position ” 

“The scale of financial support that may be required is beyond devolved administration budgets, and we welcome further discussions with HM Treasury on this to maintain the strength, stability and strategic direction of our sector as a whole.”