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By July 6, 2020 Read More →

AGENDA WEST BUSINESS NEWS: shock at £19bn black hole that could see 13 universities liquidated with suppliers left with billions of pounds of unpaid invoices

Printers, couriers, office suppliers, stationers, publishers and a host of businesses could be left high and dry if 13 universities go to the wall due to Covid-19 according to a report by the Institute of Fiscal Studies (IFS).

arah Harris writing in the Daily Mail said: “The IFS has estimated that long-run losses across the UK higher education sector could come in anywhere between £3 billion and £19 billion – or between 7.5% and nearly half of the sector’s overall income in one year. Even the most likely situation would see losses of £11billion.”

If the collapse happens then some 130,000 students would discover they would have no choice but to seek a different educational institute this September. Suppliers too would find themselves in a fix with billions of pounds owing to them, the lenders, students and staff, let alone the knock on effect to the local economies. In the last five years more universities have opened including St Mary’s Twickenham, Arden, Suffolk and Leeds Arts amongst others although there is no suggestion these are under threat from the UK’s 130 institutions. However the report, funded by the Nuffield Foundation, notes: “While there is no precedent for the liquidation of a publicly funded university in the UK, it is explicit Government policy that universities can fail.”

The report says institutions face ‘big losses’ from falls in enrolment, particularly of international students. And they are also set to lose income from student accommodation and conference and catering operations, as well as take a hit on long-term investments and increases in the deficits of university-sponsored pension schemes. 

Ian Carrotte of ICSM Credit said: “We have seen individual colleges go into administration in the past but this would be a shocking collapse as universities are often the main economic driver of smaller cities and large towns. My concern is for suppliers as universities are huge consumers of paper and print, all manner of modern communication infrastructure as well as freelance lecturers. The IFS report reveals the continued effect of the lock down and the Government must step in or this could be a disaster. The IFS estimated the rescue the 13 universities would cost an estimated £45bn.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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