Fees reform may leave dozens 'at higher risk'

The Higher Education Funding Council for England is planning for a "worst-case scenario" of almost two dozen universities and colleges being "at higher risk" by the end of the first year of the new tuition-fee regime, it has been revealed.

The forecast from Hefce's audit committee says that by the end of 2012-13, there could be up to 23 institutions in the category. They may need financial and organisational support to stop them going under.

Although the comments, revealed in papers from the meeting of Hefce's board on 9 December, point out that the figure is liable to change, they confirm that a sizeable proportion of English universities face a tough transition to the new funding arrangements.

According to Hefce, "at higher risk" institutions "face threats to sustainability" and serious question marks over the use of funds, or have "materially ineffective risk management, control or governance".

The audit committee document does not give the current number in the category, but notes that there has been no recent increase, with five institutions "showing an improving position".

Institutions known to have been in financial straits in the past two years include the universities of Cumbria, Gloucestershire and London Metropolitan University.

Gloucestershire recently posted an improved set of annual results, but the institution still suffered an overall deficit, after exceptional items, of £1.2 million. It continues to service long-term debts of almost 40 per cent of its income.

Cumbria also moved from a deficit to a surplus on day-to-day operations in 2009-10, but exceptional items kept it in the red by £8.9 million, an improvement on its 2008-09 deficit of £11.4 million.

London Met, meanwhile, recorded a surplus on continuing operations of £900,000, down from £9.4 million in 2008-09.

Some have predicted that specialist institutions could also be threatened by the new fees regime due to their reliance on Hefce grants.

A University and College Union report, published last month, found institutions to be at risk, including some smaller specialists.

simon.baker@tsleducation.com.