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University given £1m bailout from watchdog



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A UK university had to receive an emergency loan of nearly £ 1 million from the higher education controller to stay afloat # 39; fall.

It was discovered that the Office for Students provided the bailout plan when the university faced the prospect of being left without money and not being able to pay the bills

Money has been repaid ̵

1; and the authority says that the university, a small and modern institution, is now financially stable. [19659004] But it highlights the fragility of university finances, which are now in a "market" and vulnerable to fluctuations in income from hiring and tuition.

The discovery of this payment is also embarrassing for the Office for Students (OFS), which recently launched a harsh message that there will be no bailouts for universities in financial distress.

Sir Michael Barber, who presides over the governor, told a conference a couple of weeks ago that it was wrong for university life he thought the OFS would help them if they were in "financial trouble" because of the lack of student numbers or excessive expenses for buildings.

"This is wrong, the OFS will not release suppliers in financial trouble," said Sir Michael.

Collapse of the University

The watchdog says that the rescue plan he provided, done at the university in September and intended for around £ 900,000, was under the rules of his previous organization, the financing council for higher education for England, under the transition regime.

There was a liquidity problem faced by the university during the summer.

But a spokesperson for the OFS said that under its own new rules, now in place, such financial support would no longer be acceptable.

The debate on bailouts followed the news of Richard Vaughan in the newspaper I that three universities were on the verge of bankruptcy.

He raised the question of whether universities, in what was conceived as a competitive market, should be allowed to go to ruin and close down.

That the watchdog was ready to recite behind the scenes shows how difficult it would be for the real

It would mean a huge interruption for the students and would mean the loss of those who are often among the largest employers and local drivers of local economies.

Financial warnings?

He could also put the watchdog and the universities in a very compromised position if a university collapsed.

They would ask him how they allowed people to turn to a university that they knew was financially at risk.

If students are approaching £ 50,000 of debt from an undergraduate program, the Office for Students, which acts in the consumer's interest, should alert students not to get on board a & # 39; university that was not financially watertight.

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But if they, or university ministers, warned that a university was in financial trouble, it would be likely to destroy the numbers of students on which Universities rely on their revenue – making it even harder for a university to dig up or ut of danger.

The OFS states that its new provisions will make the university sector more financially sound.

As a condition for registration with the SFO, the regulator will need to make sure that the universities are financially secure for at least the next three years.

Short-Term Loan

A spokesman for the OFS said that the institution to which he lent money could now pass this financial test and show that "it does not have a real risk of insolvency for the next three years "

" During the summer, we provided a short-term liquidity loan at the university, which was quickly repaid in full and repaid before registration, "said the spokesperson for the ; OFS.

He said he was paid under "hereditary legal responsibilities that will cease to apply at the end of this transition year in July 2019".

"We were very clear that we would not have saved any universities, we also said that where a university is in trouble, we should first make sure that they have a strong student protection plan and secondly we would act on under the circumstances.

"This could mean for example the need to complete a strategic review option to identify future options including the restructuring of their business model, sale of property or mergers. "

It will also raise questions for the current review of university funding in England.

There have been suggestions that the main figure for tuition fees could be reduced to £ 6,500 from £ 9,250.

Although this would mean less money going directly to the universities, it would mean that more university budgets could be distributed centrally, making them less vu referable to annual changes in student numbers.


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