UK universities could go bust in wake of no-deal Brexit, think tank warns

The warning came as university leaders called on MPs to ensure research funding was not lost

Universities face the threat of going bust in the wake of a no-deal Brexit, a leading think tank has warned.

Vital UK research – including projects that are developing cancer treatments and combatting climate change – could be “compromised” if Britain leaves the EU without a deal, university bosses have said.

It comes as the Russell Group, comprising the most selective universities in the UK, revealed that the number of EU students enrolling in their institutions has fallen for the first time in five years.

A predicted fall in EU student numbers and a potential loss of research funding due to a no-deal Brexit could hit universities’ finances.

It is understood some institutions could be forced to seek a government bailout to stay open.

Groups representing more than 150 higher education institutions across the UK have written to MPs warning that leaving the EU without a deal is one of the “biggest threats” the sector has ever faced.

The letter calls on the government to urgently ensure that universities do not miss out on access to EU funding schemes – which they say are worth €1.3bn to the UK – in the wake of a no-deal Brexit.

University leaders warn that a no-deal Brexit could lead to “an academic, cultural and scientific setback from which it would take decades to recover”.

World-leading academics, researchers and EU students could leave for countries where access to EU research programmes are not at risk, university bosses have said.

The warnings came after figures revealed that the total debt owed by the sector UK-wide rose to £10.7bn over the past year as competition to recruit students has intensified.

Nick Hillman, director of the Higher Education Policy Institute (Hepi) think tank, said he was concerned about the financial future of the university sector because of the negative impact of Brexit, as well as a fall in the number of 18-year-olds and the government’s review into tuition fees.

“A no-deal Brexit would mean even more upheaval than other forms of Brexit for the sector,” he said. Analysis for the think tank has predicted a 57 per cent drop-off in incoming EU students.

Mr Hillman said: “I do think a small handful of universities could get close to the wire this year. But there are many shades of grey between being solvent and going bust, including takeovers, mergers and bailouts. No British university has even gone bust. It could happen for the first time this year.”

He added that the government would probably have to intervene to stop a large higher education institution from going bust.

His comments come after the higher education regulator in England, the Office for Students (OfS), said in November that universities that are not financially sustainable would not be bailed out.

The warning followed reports that a number of universities were on the verge of bankruptcy.

Sir Anthony Seldon, the vice-chancellor of the University of Buckingham, has warned that a no-deal Brexit could contribute to the financial failure of at least 10 universities in the UK.

He told The Independent: “It will make the recruitment of students only more difficult and it is insane for the country.

“If Brexit is to happen then it has to happen in way that allows the continuities to continue, because if we damage the university sector the whole country will suffer.

“Universities are often the powerhouses of some of the most left-behind areas of this country and some of them are the most vulnerable.”

Sir Anthony added: “The ones that will close will be in the areas of greatest social and economic need. The damage that will do will be immense to the social fabric of this country and the economy of those regions.”

New figures released by the Russell Group show that the number of EU students enrolling in the leading UK institutions in the 2018-19 academic year fell 3 per cent from the previous year.

The number starting taught postgraduate courses – such as those taking taught masters – fell by 5 per cent, meanwhile those starting postgraduate research courses – such as PhD students – fell by 9 per cent the same as in 2017-18, according to data.

Dr Hollie Chandler, the Russell Group’s senior policy analyst, said: “It’s fair to assume that uncertainty over Brexit and the UK’s future relationship with Europe could be a significant factor.

”The drop in postgraduate research courses is especially troubling – these students contribute directly to the UK’s research capacity.

“If we leave the EU without a deal, the uncertainty felt by prospective European students will only get worse.”

Professor Dame Janet Beer, president of Universities UK, said: “We are home to one of the best research systems in the world, attractive to stellar academics, top students and global partnerships, and we must not let this be compromised by a no-deal Brexit.

“Time is running out to make decisions on issues which will ultimately affect the country and society as a whole.”

Robert Halfon, Conservative MP and chair of the Education Committee, said: “With the UK leaving the EU, there is all the more reason to ensure that our universities are fit for the future and focused on meeting the country’s skills needs.

“Our committee’s report on value for money in higher education outlined how they can play a significant role in filling skills gaps and boosting productivity by promoting degree apprenticeships and improving access for disadvantaged students.

“By focusing on a more skills-based future, our universities can ensure they remain among the world’s best performing institutions.”

The Department for Business, Energy and Industrial Strategy has been approached for a comment.