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British universities face an uncertain financial future precipitated by coronavirus restrictions

• July 02, 2020

Large numbers of universities across the UK have moved to partial or full online learning in the upcoming academic year in order to adhere to social distancing guidelines. The University of Cambridge has announced that all lectures will be delivered online until the summer of 2021, with the possibility of small group teaching taking place provided social distancing is possible. Meanwhile, a number of other universities such as the University of Warwick and the University of Manchester have confirmed that lectures will be delivered online until January at the earliest.

While these measures are unarguably necessary until a vaccine or effective treatment is available, large swathes of students deem online lectures to be an ineffective substitute not only in terms of teaching quality but also unwilling to forfeit the ‘university experience’ to which lectures provide a critical foundation. Invariably, freshers’ weeks have been cancelled or adapted to be wholly or in part digital, this in particular for some is the nail in the coffin, leading students scrambling to fill in UCAS deferment forms to 2021 or in some cases, deciding against attending university altogether.

According to a survey of UK-domiciled students, more than 20% of students have the intention to defer entry to 2021, presenting major financial strains for many cash-strapped universities, facing a major shortfall in lost tuition and accommodation fees. More worryingly perhaps, is the drop in international student recruitment, who are charged significantly higher tuition fees than their UK/EU counterparts, hardening the financial impact. Recent analysis suggests British universities will be hit with a £2.6 billion deficit and 30,000 jobs in the sector at risk of being axed. More competitive universities in the Russell Group stand to bear the brunt of the blow, since these are more popular with international students, therefore more-so relying on their financial contribution to universities’ budgets. Even if the government provides financial support, many universities will have to take significant cost cutting measures to ensure longevity, at least until student recruitment returns to normal, it would be unsurprising to see intake figures still lower in 2021 if fear and unease remains to loom owing to coronavirus.

However, this may have more serious implications in precipitating a skills shortage in the years to come when the ‘missing’ students would have graduated in 2023. Early data from UCAS would suggest 46,000 fewer UK students, while the international student numbers will be decimated. In 2018, almost 7,000 international students acquired work visas upon graduation, it is almost impossible to make predictions as to by how much this will drop in 2023, if at all. A lack of graduates in the order of 50,000 presents the prospect of a skills shortage, there is no available data as to whether certain degree courses will be more affected by deferments, however companies running graduate schemes or further training may face a difficult recruitment cycle in 2023 as a result of lower graduation numbers. Companies may be forced to lax recruitment standards or reduce the scope of schemes to mitigate any disruption that materialises.

Coronavirus has had a devastating effect on the economy and all parts of society, a potential skills shortage presents an unwelcome issue in the long-term, the scale of which is dependent on by how much student recruitment numbers drop.

The Graduate Project continues to offer the highest quality candidates and support to businesses despite these difficult times. If you would like assistance in your recruitment or are searching for employment give us a call at 0207 043 4629 or email us your CV to recruitment@thegraduateproject.co.uk.

Authored by Tyler Cairns