Phillipson to respond to university funding crisis this week

The new UK government will outline some initial steps aimed at shoring up the finances of the university sector later this week, according to education secretary Bridget Phillipson, who suggested that the answers lay in further changes to regulation.

Appearing on BBC Breakfast, the Labour minister repeated that she has “no plans” to increase tuition fees or provide further funding to help struggling universities, as she indicated that a change in the narrative on international students could help stabilise institutions in trouble.

Asked if the government would step in if a university were in danger of going out of business, she said institutions needed to “manage their own budgets” and that the priority was about “good value overall – for the students, for the institution, and for the taxpayer”.

“In order to make sure we are stabilising the sector, we do recognise the important role of international students…to the financial sustainability of our institutions,” she added.

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The Sunday Times reported that three leading institutions are understood to be in danger of bankruptcy, with ministers being urged to introduce an emergency rescue package.

Anything short of an emergency bailout will be “insufficient to stave off catastrophe”, Jo Grady, general secretary of the University and College Union, has warned in a letter to Ms Phillipson and higher education minister Jacqui Smith, the paper said.

Speaking to the BBC Today programme, Ms Phillipson said she had been “urgently” going through a process with officials to understand what needs to be done to “shore up the sector.”

The government will lay out its initial steps to parliament later this week, she added, and suggested this could involve changes to the Office for Students (OfS), the English regulator. 

“We need to see a sharper focus on the regulation of our sector to make sure that our universities are on a firm footing,” she said. 

An interim chair of the OfS will also be appointed this week following the resignation of James Wharton, a Conservative peer.

Ms Phillipson promised that Labour will take a different approach to its predecessors and “recognise that universities are a public good that are central to jobs and opportunities and growth”.

“What we had under the Conservatives was a fascination and a fixation with picking fights with the sector, completely needless, just using universities as a source of cheap headlines,” she added. “That is now at an end.”

The education secretary was speaking after the government announced the creation of Skills England, a new body designed to plug the country’s skills gaps by bringing together the work of key partners.

The organisation, which will be established in phases over the next nine to 12 months, will identify training courses that can be funded under an expanded growth and skills levy. It will be chaired on an interim basis by Richard Pennycook, former chief executive of the Co-operative Group and a non-executive director at the Department for Education. 

patrick.jack@timeshighereducation.com