Funding council steps in to help university’s cashflow

by
21 April 2010

by Margaret Holness Education Correspondent

THE University of Cumbria, which is strug­gling with a deficit said to be approaching £30 million, was given a cash advance by the Higher Education Funding Council for Eng­land (HEFCE) last month to meet its im­mediate financial commitments, including its wages bill, it was disclosed in a BBC Radio 4 programme on Monday.

Trevor Curnow of the Universities and Col­leges Union (UCU) told the programme The Report that the union had seen Cumbria’s annual accounts, and had concluded that the university, second largest of the Cathedral Group institutions, had run out of money.

The Vice-Chancellor of Cumbria, Professor Peter McCaffrey, said: “Because of the deficit, our cash reserves are not as great as they once were. We had applied to HEFCE with regard to a cash advance to see us through this particular period.”

Earlier this year, Cumbria negotiated a £25-million emergency loan from HEFCE (News, 12 February). A Cumbria spokesman con­firmed on Wednesday that the cash advance was in addition to that loan. “It is a separate pot of cash,” he said.

HEFCE is already overseeing efforts to stabilise Cumbria’s financial problems, which have built up since the institution, which is centred on the former St Martin’s C of E College of Higher Education, Lancaster, and one of the largest teacher-education centres in the country, be­came a university in 2007. The problems are said to have arisen largely because Cumbria acquired ventures from other universities, which proved to be liabilities rather than assets.

Another Cathedral Group institution, the University of Gloucestershire, is also facing serious financial problems. Last month, it was announced that the Vice-Chancellor, Professor Patricia Broadfoot, was to take early retirement, and had already handed over the reins to her deputy.

It is understood that 200 members of staff at Cumbria and at least 100 at Gloucestershire face redundancy. Both universities are closing some campuses, and are said to be viewed as “vulnerable” by HEFCE. Their financial problems are exacerbated by cuts across the board to the higher-education sector, which are expected to deepen after the General Election and the publication of the Browne Review.

In a statement on Monday, the UCU general secretary, Sally Hunt, said: “What we are see­ing at Cumbria is just a sign of things to come. I think there is a very real danger of more and more universities facing financial meltdown.”

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