Wales’ universities ‘may need government support’ as a result of the Covid-19 crisis, report finds

Cardiff University. Picture by Stan Zurek

Welsh universities face a serious threat to their financial position and may require further government support, according to analysis from Cardiff University’s Wales Governance Centre.

The report by Cian Siôn, a researcher on the Wales Fiscal Analysis programme, reveals a stark series of findings pointing to a dramatic loss of tuition fee income for the sector in Wales as a result of Covid-19.

Taking into account predicted falls in international student recruitment and home student enrolment, the report estimates that the sector could lose anything between £100m and £140m in 2020-21 from fee income alone.

The report analyses the financial health of the Higher Education sector as a whole, finding that tuition fees account for £892 million (54.7%) of universities’ income in Wales, compared to 50.2% across the UK.

“Taken together, pressures on student recruitment as a result of the Covid-19 pandemic represent a serious financial threat to the Higher Education sector in Wales,” Cian Siôn said. “Several surveys point to a sharp drop in international and home student enrolment in September.

“Welsh institutions were already in a relatively weaker financial position before the crisis, so this is a blow that will be felt more acutely here.”

 

‘Importance’

The report also reveals the sector’s relatively greater importance to the Welsh economy compared to England or the UK, with universities providing 17,300 full-time Welsh jobs, contributing 4.8% of GVA and accounting for 32.5% of the country’s Research & Development (R&D) spending.

Previous research from the Wales Fiscal Analysis programme has found that increasing R&D spend in Wales is critical to improving the nation’s economic performance.

The UK Government’s general economic response measures may help institutions facing an immediate shortfall in funding. But the sector’s reliance on fee income from multi-year programmes means the effects of a smaller student intake in September will likely be felt for several years. In the absence of further government support, operational challenges could ultimately lead to job losses and a shrinking of the sector in Wales.

According to the analysis, the three institutions with potentially the most to lose if there is a fall in international student recruitment are Cardiff University, Cardiff Metropolitan University and Bangor University.

The three institutions with potentially the most to lose if there is a fall in ‘Home’ student recruitment are Glyndŵr University, University of Wales Trinity Saint David and Cardiff Metropolitan University.

Cian Siôn added: “Governments in both Cardiff and Westminster will be carefully considering which sectors most urgently require additional support in order to withstand the effects of the pandemic.

“We hope that these findings clarify the importance of the Higher Education sector to the Welsh economy and that without some kind of tailored support package, there may be a serious financial threat to most universities in Wales.”

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Nigel BullPlain citizenHuw DaviesGruff Williams Recent comment authors
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Gruff Williams
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Gruff Williams

Hardly “Wales’ universities”, more like universities in Wales. Following a planned programme, we now have a situation where as Gwynfor Evans described, “hundreds of English academics teach thousands of English students.”

Plain citizen
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Plain citizen

These institutions have expanded by marketing themselves to high fee paying postgraduate and foreign students (a sector for which demand is volatile at the best of times), paying their admin staff (eg vice chancellors) vast amounts and incurring enormous pension liabilities and largely ignoring local (ie Welsh) needs in a bid for growth. If they go bust as they need more cash than govt is offering other industries so be it. The plethora of ‘Mickey mouse’ courses and institutions needs to be reduced and taxpayer funded courses based on what we think will build a sustainable Welsh economy, possibly based… Read more »

Huw Davies
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Huw Davies

Well P.C this will embarrass you. We are almost completely on the same page on this matter. I might have written it a bit differently but if you were able to see some of my earlier rants/tirades on this subject area you would see the steam coming off my scripts. Absolute scandal tolerated, nay encouraged, by politicians .

Plain citizen
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Plain citizen

Great minds . . . .

Nigel Bull
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Nigel Bull

Unanimity among many, which is both a change, pleasant and for me in this instance correct. The Universities of Wales lost their way many years ago and the vast investments were not for the furthering of knowledge of those in Wales. It needs a review from top to bottom, with a lot of cash diverted to adult education which has been salami sliced to very little………unless of course you want to study Welsh!