Welsh Government considering an emergency fund for ‘bailing out’ universities in Wales

The Welsh Government is considering introducing an emergency fund to support universities in financial distress, following warnings of a potential £100 million funding shortfall across the sector.

Universities in Wales have raised concerns over their long-term financial sustainability, prompting discussions about the possibility of a bailout.

Discussions about an emergency fund emerged after warnings of significant financial losses, including Cardiff University’s £30 million deficit leading to inevitable job losses, and Bangor University’s £9 million shortfall.

The University of South Wales (USW) has also projected a £23 million income loss, raising fears of widespread job cuts and restructuring.

The proposed emergency fund would aim to provide a safety net for institutions facing serious financial challenges. However, Vikki Howells, the minister responsible for post-16 education, has stated that no Welsh university is currently at risk of going bust.

According to Wales Online, the concerns about university funding have been heightened by recent figures showing a decline in the number of Welsh 18-year-olds applying to university. This marks the lowest proportion of applicants from Wales in 15 years and has coincided with a rise in tuition fees.

The decline in international student numbers has been another key factor, with USW vice-chancellor Dr. Ben Calvert saying that international student recruitment “could be 40 to 50 per cent lower than last year” and that the voluntary redundancy scheme that has been implemented “would not be sufficient.”

He added that “restructuring and consultations on redundancies with unions are expected before Christmas.”

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A £1 billion rescue plan has been established for universities in England, which includes a bail-out package, fee increases, and cuts to courses and staff. When asked about a similar plan for Wales, Vikki Howells acknowledged the UK Government’s initiative but emphasised that Wales would be taking a different approach.

Plaid Cymru’s shadow education secretary, Cefin Campbell, warned that immediate action is needed to prevent the closure of universities and said: “We could lose these very special institutions – a number of them. Considering the financial hole that faces many of our Welsh universities, thought to be £100m, the pressure is growing on you as a government to work with our universities to find solutions that will protect jobs, students and our wider economy.”

Tom Giffard, the Conservative shadow education secretary, echoed these concerns, saying that the situation is “stark”.

He highlighted the gap between Welsh and UK university applications, with only 33 per cent of 18-year-olds in Wales applying to university this year, compared to the UK average of 41.9 per cent.

Despite these concerns, Howells reassured the public the policy remains in its early stages but elaborated by saying: “They [Welsh universities] will be taking their own decisions, albeit with an input and a steer from myself and from Medr”. 

The proposed emergency fund is being discussed in collaboration with Medr, a new body established in August that now oversees all post-16 education and research in Wales.

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