China News Service, July 7 (BBC) Chinese website reported on the 7th that the global epidemic has a huge impact on the British higher education industry. The latest research shows that unless government financial assistance is provided, about 10% of universities are likely to face bankruptcy risk.
As a developed economy dominated by the service industry, the education industry is an important part of the economy. According to official British data in 2019, the annual output value of the education industry is as high as 73.1 billion pounds, supporting about 3% of the country’s employed population.
The British think tank Finance Institute (IFS) said that due to the global epidemic, the number of international students has plummeted, making some well-known universities that usually rely on international students as the source of income face the dilemma of a sharp decline in income.
Studies have shown that the total loss during the UK education industry epidemic is still "highly uncertain", estimated at between 3 billion and 19 billion pounds, which is 7.5% to 50% of the industry's annual income.
Data map: University of Oxford, UK. China News Service issued Sun Zifa photo
Student competition
Experts warn that the impact of the new crown epidemic may also trigger a domino effect, or a vicious cycle of "cannibalizing" in the British education industry.
The analysis believes that "brand-name" colleges have a large number of international students and a large faculty and bear a large number of pension obligations. They hold a certain level of savings or financial buffers and can choose to reduce losses by recruiting more British students. However, this kind of behavior inevitably directly damages the less selective general colleges and universities and compresses the latter's student and financial resources.
The study warned that the end result of the student competition is a large number of layoffs and the impact on the quality of teaching, because the ability of universities to reduce losses through cost savings is limited.
The researchers did not name the universities that are at risk, but according to their estimates, at least 13 of the 165 higher education institutions in the UK, or about 10%, will eventually face negative asset risk.
The study therefore concluded that without government bailouts or debt restructuring, these institutions are unlikely to sustain in the long run.
IFS research economist Elaine Drayton said that for the government, targeted financial assistance will be by far the lowest cost option. Because, if the government decides to provide aid, it is estimated that the cost of direct aid is only 140 million pounds, and the consequences and losses of a large number of university failures will be many times this.
Data map: Oxford University and Cambridge University held rowing competitions.
The government is facing pressure from all walks of life
The National Union of Students said that the crisis exposed many flaws in market-oriented management education.
A student union spokesman said: "When funding is so unstable, it is no wonder that our universities and the work of thousands of faculty and staff are at risk."
Joe Grady, Secretary General of the British Association of Universities and Colleges, also called on the government to intervene. Grady said: "We need a comprehensive support package to protect employment, protect our academic capabilities, and guarantee the survival of all universities."
In a statement, the UK Ministry of Education stated that a package of government plans announced in May allowed UK universities to obtain business support and job retention plans to alleviate cash flow problems. In addition, key research institutes across the UK will also receive partial government funding and additional research funding.