UCL accused of risking financial ‘body blow’ as borrowing doubles in a year
UCL’s overdraft is worse than yours
As students stare at their post-Christmas bank-statements through teary eyes, it appears that UCL’s money situation is even more worrying.
Figures obtained by The Times show UCL's borrowing skyrocketed from £37m to £134m, prompting UCL UCU to call it "hugely worrying".
UCL is one of five unis reported by to have doubled borrowing between 15/16 and 16/17, as senior figures warn of a credit crisis in the university sector.
The increased borrowing, ambitious construction projects worth £1.3 billion, including the massive new Stratford campus, and a risky dependence on maximum student tuition fees, have lead to UCL management being accused of “over-exposing UCL finances” and risking a "huge body blow.
Whilst the Stratford campus is set to open in 2022, UCL closed its Adelaide campus in 2017, and will pull out of the Qatar campus in 2020.
The UCL branch of the UCU have expressed concern about UCL's current finances, telling The UCL Tab: "The Provost and Chair of Council have worked together to over-expose UCL's finances, betting that student loan money, at £9.250 per student, would be forever available. A huge building programme, including a massive new campus at Stratford, makes UCL's debts hugely worrying in a very uncertain environment.
"Currently faculty contributions are already being hiked up this year and next year (to a total of 30%) to cover these costs. Should the student loan be cut, and/or overseas students significantly reduce, as many have warned could happen, the University will suffer a huge body blow. We will not stop calling out the decisions that made this happen.”
UCL's current high levels of debt are concerning as there is growing uncertainty around the profitability of the university sector. The new buildings would allow UCL to recruit more students and the buildings would be used as leverage for new loans.
The Provost, in 2014, implemented a strategy that he claimed would create a six per cent increase in overall surplus by 2017/18, believed to be achievable through minimal changes and little sacrifice.
Though the imminent financial collapse of UCL is unlikely, the university's increased debt is likely to put departments under strain.
As Russell Universities begin to feel the pain of uncertainty, with European student numbers falling and MP's increasingly open to the prospect of cutting tuition feels, UCL's great gamble appears likely to backfire.
A UCL spokesperson told The Times that the overseas campuses were developed “in close collaboration with a host country, to provide specific academic courses and focused research over a limited time period. These partnerships have been small-scale and fully funded by third parties, at no direct or indirect cost to UCL.” It said all the foreign campuses had achieved their objectives on time.