Failing universities will not be bailed out, higher education regulator says

Universities that are not financially sustainable will not be bailed out, the sector’s regulator has warned. Sir Michael Barber, chair of the Office for Students (OfS), has said the “too big to fail” thinking among universities risks “bad decision making” – including borrowing money on the market to build buildings. The Independent reports.

Speaking at a conference on Tuesday, he said: “We have heard a number of times from university leaders that if they got into financial trouble then ‘they would be ok because the OfS would bail them out’.

Sir Michael told a conference of leaders in the university sector that bailouts would be “inconsistent” with the principle of university autonomy and it would not be in the “students’ longer term interests”.

Sir Michael called on institutions at risk of failure to be open about financial difficulties with the regulator before it is too late. “There will be no bailouts but there will be other solutions from A and B,” he said.

Speaking to the press after his speech at Wonkfest, he said: “Universities are autonomous institutions largely – they are controlling their student numbers, their courses, whatever they put on. Sometimes they are borrowing money on the market to build buildings or whatever else they want to invest in.”

Sam Gyimah, the universities minister, told the event he did not want universities to fail. But he said: “We do not see it as the government’s role to bail universities out when they make reckless financial decisions.”

Matt Waddup, head of policy and campaigns at UCU, said: “The regulator and government should be supporting universities to excel, not washing their hands when things don’t go to plan”

Read more Failing universities will not be bailed out, higher education regulator says

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