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So here’s the big question

Although tuition fees for home students are still viewed as unacceptably high, most universities now make a loss on every one they recruit, as inflation has steadily (and then rapidly) devalued the £9,250 annual fee, last set in 2017. As the profitable overseas students have declined, something has had to give: well over half of UK universities are now cutting staffing costs, be it through compulsory redundancies, voluntary severance schemes or freezes on hiring and promotion. And outside the rarefied global elite, many prestigious institutions are losing ground in the reputational battlefield of international league tables. At some point, there is going to be a high-profile bankruptcy or clumsy last-ditch merger, unless the next government acts quickly and decisively.

What’s wrong with bankruptcy?

16 thoughts on “So here’s the big question”

  1. The Meissen Bison

    the guardian wants to preserve the jobs of academics who read the guardian.

    More sensible would be for any support from government to a given ‘Uni’ to be linked to the student loan repayment record of its alumni. Raising the fee ceiling would merely perpetuate useless qualifications at the taxpayer’s expense.

  2. This whole subject is a Good Thing.

    By privatising the Universities by introducing Tuition Fees, Blair has opened them up to market forces.

    This is a typical and indeed predictable outcome.

    Rapid proliferation and expansion
    The weaker ones fail and there is consolidation.

    Excellent ! Text book economics !

  3. Bankruptcies are for nasty business that give people goods they value in exchange for money. Universities employ nice people to teach people women can have a penis and whiteness means industry which is bad so they should be protected.

  4. “It was an open secret within the sector that new postgraduate courses were being concocted not for pedagogical reasons, but on the assumption that a few dozen overseas students would pay upwards of £20,000 to take them, thereby bankrolling the research time of academics and the vanity projects of vice-chancellors.”

    Now we get to what really happened. As the money increased, they spent it on stuff they wanted. Like my old college became a uni and spent £330m on a new campus which has trees and gardens, a lovely student union, health centres, support centres. Completely unnecessary and in a worse location as it’s outside of town rather than in the middle.

  5. What the fuck are they spending the money on? That’s 28 grand per undergraduate doing a 3 year course.

    Two undergraduates recruited pay the salary of one lecturer, three if we are adding some pretty generous overhead. It was admittedly a very long time ago but bench overhead (the proportion of grant the university kept for itself) at a medical school, which should be vastly, incalculably higher than teaching overhead in most faculties, was 40% back in my day.

  6. A possibly more important question is: ‘what protections do you offer your current students in case of bankruptcy’.

    Another is:
    ‘What functions need maintaining after bankruptcy and how will that be managed’ (one of my alma maters merged and can no longer confirm my degree is real …).

    Kind of like a bank run – protect the account holders not the bank.

    Long ago when I was involved HMT ran a line on competition for students and R&D funding but could never explain how they would let or manage a Uni go into bankruptcy.

  7. What’s wrong with charging fees that cover the costs?

    BiG: I’ve just looked up the current fees at my old school: it starts at £11k p.a. for 5-year-olds, rising eventually to £16k. Add 20% to that once Labour gets in, and you’ll be knocking on the door of £20k to educate a 16-year-old for a year. And although it’s moved a little upmarket since I was there, it’s hardly Eton or Harrow. I’ve no doubt most universities could be better run, but even so I can’t imagine how they’re expected to wash their faces, let alone compete with the world’s finest, on £9,250. It’s a token, a typical Blairite sop towards both sides that satisfies neither.

  8. “bankrolling the research time of academics and the vanity projects of vice-chancellors.”

    That was certainly part of it in my experience (and of course much of the research was actually socialist propaganda, the actual technical research usually getting its own funding).

    But a lot of it was just pissed away on middle management and administrators, and favoured staff getting time allowances for not doing very much. You’re now ‘widening access co-ordinator’, well knock a few hours per week off your teaching load, that sort of thing.

  9. One hope for me is that a few do go bankrupt, and that someone will buy a few (after the staff are laid off by the liquidator, of course) and use the university status and degree-awarding powers to set up something much more business-oriented and efficiently run to offer cheap, useful degrees and make a profit.

  10. What is that money spent on?

    In the US and Canada, it’s spent on administrators. Which aren’t just HR and DIE people (though there’s far too many of those), but every professor has a secretary, there’s lots of athletic staff, janitorial staff, campus security, etc.
    We know this is happening from publicly available budgets. Administrative costs have risen faster than pretty much anything else in the economy, and by a lot.

    Cutbacks never seem to happen on the administrative side either.

  11. Universities no longer produce social goods, they produce social bads (sexual degeneracy, foreign immigrants, debt, the falsification of knowledge, leftism).

  12. BiND in a wet and muddy Schwerin campsite.

    “ What’s wrong with bankruptcy?”

    Then end of the wedge. If Labour lets it happen what happens to the march through the institutions if we ever get a genuine right of centre government?

    They haven’t spent generations marching through the institutions to give up their victory that easy, expect Labour to increase funding through some financial chicanery.

  13. Sam,

    “BiG: I’ve just looked up the current fees at my old school: it starts at £11k p.a. for 5-year-olds, rising eventually to £16k. Add 20% to that once Labour gets in, and you’ll be knocking on the door of £20k to educate a 16-year-old for a year. And although it’s moved a little upmarket since I was there, it’s hardly Eton or Harrow. I’ve no doubt most universities could be better run, but even so I can’t imagine how they’re expected to wash their faces, let alone compete with the world’s finest, on £9,250. It’s a token, a typical Blairite sop towards both sides that satisfies neither.”

    I have no idea what private schools do, but break it down for say, an English or Computer science courses. A Regus office is about £99/person/month. So out of £9K, we have to take £1200 off for the premises. And Regus covers it all – cleaning, coffee etc. That still leaves £7800/year. Now if I’m teaching 20 students, that’s £156K for the teaching, prep, marking, admin etc. And I work, what, 8 months of the year? How much admin per student? Even if it’s a grand, that’s still £136K. Or the equivalent of £200K/year to teach computer science.

  14. Bloke in Germany

    Sam, the cost structures are very different. A primary school provides what, 6 hours a day of adult contact time and supervision in groups of about 8.

    A reasonably attended university course provides about 6 person hours a week (in an arts faculty), rising to about 30 hours a week in preclinical medical courses, to groups of dozens or even hundreds of attendees at a time. You can recycle your training materials after first year of teaching, primary teaching and university teaching are no different here. Things change, for the most part, slowly enough in medicine, not at all in history o fart.

    The university teachers are largely not substantially more expensive than primary school teachers. The buildings required to house 300-seat lecture theatres are probably a bit more expensive. We can argue about whether primary schoolers or undergraduates cause more wear and tear. Not much in it I would imagine.

    The primary school, though why one would pay out of pocket for one is beyond me, looks like great value compared to most university courses, and should be substantially less profitable, assuming well run school and well run university.

  15. There’s a hugely entertaining article in today’s Times2: I’m a graduate. Will I ever get a job?

    The article carefully skirts around the actual subjects studied, which it turns out were Politics and International Relations at Cambridge, then an MA in Journalism at City University. And she still can’t get a job. It’s a mystery innit (probably all the fault of the patriarchy, though).

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