Universities should get their own finances in order before asking for taxpayer help, the education minister has told the BBC.
Speaking to Radio 4’s Today programme, Bridget Phillipson said universities were expected to “manage their budgets” as independent institutions.
The move follows a call by the Universities and Colleges Union (UCU) for bailouts for financially struggling universities.
Ms Phillipson said Labour recognised universities as a “public good” and would seek to put the sector on a stronger financial footing in the long term.
UCU general secretary Jo Grady warned this weekend that universities face “catastrophe” without an emergency government bailout.
In its latest assessment of university finances, the higher education regulator, the Office for Students (OfS), said 40% of universities were forecasting deficits.
This suggests that some institutions are making optimistic predictions about recruiting international students, who bring in more money in tuition fees than UK students.
The Education Secretary said she wanted to maintain the graduate visa route, adding that “we want to welcome international students to this country.”
Which universities are making budget cuts?
Vivienne Stern, chief executive of Universities UK, which represents more than 140 institutions, told the Today programme on Monday that “the majority of the sector is struggling”.
She said 70 universities were currently engaged in cost-cutting exercises, adding she would be “quite surprised” if almost all universities did not do the same by the end of the year.
“We’ve gone way beyond budget cuts that no one will notice,” she said, adding that the coming cuts will soon begin to affect student-staff ratios and the courses universities can offer.
Universities across England are tightening their finances, with some looking to cut staff by up to 10% and closing or merging courses.
Staff at Goldsmiths in London have also joined a boycott of protests against plans to cut jobs at the firm.
Even if the new government does not offer universities immediate comfort in the form of a taxpayer bailout, it is clear that it will still have to seek long-term solutions to the sector’s financial problems.
Last week the new government accepted the resignation of Lord Wharton as chairman of the OfS.
He had been criticised for his lack of impartiality in this role, as he had continued to support the Conservative Party in the House of Lords at the same time.
The Education Secretary said she would set out in detail to Parliament this week how the OfS should operate.
One might expect to see her ask him to focus on his most important mission – ensuring the financial stability of the sector – rather than getting drawn into debates about the culture war.
The body had already been given a role in policing free speech on university campuses, with new powers to fine institutions and student unions set to come into force this summer.
