COVID-19 – Our Biggest Challenge Yet

Aaron Porter, Director of Policy and Engagement at IDP Connect, shares his views on how COVID-19 is impacting the Higher Education sector in the current academic year and beyond.

COVID-19 is undoubtedly the most serious threat to the sustainability of the UK higher education sector we have yet encountered.

It is hurting universities in so many different ways. Both the breadth and depth of those impacts at the same time is what makes the situation so grave.

Immediate challenges

Most immediately, we are fearing for the physical wellbeing of our staff and students. We don’t know the exact numbers that have contracted the virus across the higher education community. Worse, we don’t know what the final death toll will be.

Our universities are playing an instrumental role in helping to fight the virus, and crucially to find a vaccine. But we are also at the front line of the fight – particularly through our close relationships with hospitals and the NHS.

Our graduating classes of nurses, doctors, clinicians and carers have gone straight into hospital wards and care homes to help the vulnerable and sick. We should be applauding them especially loudly on Thursday.

Financially, the coronavirus is testing each of our universities individually and collectively. This week, the Office for Budget Responsibility (OBR) released its first analysis of what it thinks the impact of COVID-19 will be on the UK economy, predicting a second quarter contraction of 35%.

The sector deemed to be most vulnerable was education. Universities were singled out even amongst that. It was modelled that there could be a 90% reduction across the education sector compared to the baseline. You can view the detail in table 1.2 of the coronavirus analysis report, Office for Budget Responsibility, 14 April 2020.

Short-term challenges

For universities right now, ensuring the safety and wellbeing of staff and students remains the uppermost concern. This is closely followed by how teaching and other university activities can continue to be delivered as close to normally as possible.

The role that national bodies have played – notably UUK – has been crucial. In a detailed letter to the Chancellor, UUK set out the financial impact that the virus is already having, and some steps that would help stabilise the sector.

UUK already estimates that the immediate impact on the sector for the academic year 2019-20 is around £790 million. This is principally from the loss of accommodation, catering, and other commercial revenues our universities would ordinarily expect.

Most universities are able to weather the in-year financial impact for 19-20. However, the situation has worsened for those universities who were already struggling to break even before the crisis.

A number of universities have begun discussions to access the COVID-19 Corporate Financing Facility (CCFF) whereby the Bank of England will buy short term debt. Even so, this simply defers matters for 12 months when the loan needs to be repaid.

It is worth remembering that even before COVID-19, around 50% of institutions in the sector were budgeting for a surplus of 3% of less. The 2019-20 in-year implications to commercial revenue will likely eliminate all of these surpluses, meaning the vast majority of the sector will make a loss.

At a local level, well-run universities are engaging openly with all stakeholders to check how they are coping with the current operating environment. I’ve heard of a Vice-Chancellor being shown how to use Zoom by their students’ union President as they discuss how to communicate and reassure students. Meanwhile, seminars are being held remotely to students in all corners of the globe.

As a governor at two very different universities, the enormity of the challenge has been brought into sharp relief. Regardless of whether the university started in a healthy or challenging financial state, the scale of the disruption is huge, particularly for staff and students.

It’s been inspiring to see how staff have responded to the crisis. It presents a reminder of the invaluable contribution that our university staff make.

The importance of scenario planning for next year has been especially critical as a governor. We must assess the exposure that the university faces, and the extent to which we can support staff and meet student expectations.

Next academic year and beyond

But this is just the beginning of the pain.

For many universities, ensuring they have enough cash to reach the beginning of next year is already a challenge, having lost the income that was expected to arrive over the spring and summer. When this is coupled with the many unanswered questions for next year and beyond, it makes credible financial modelling almost impossible.

At this stage, it is unknown whether face-to-face teaching will be able to commence in September. Some universities have explored delaying the start of term (particularly for new starters) to November or even January 2021.

I have long held the view that the university sector should run a January – December calendar, rather than the current academic calendar. It would solve the major roadblock to PQA and bring us in line with key international markets. If there is one lasting benefit to gain from this crisis, perhaps the sector will agree to move to a more logical academic calendar.

Meanwhile, attempting to model the impact on domestic and international recruitment is difficult. At the outbreak of the virus some universities were imagining 10% falls in domestic and 25% in international. Now, many are expecting that to be 20% and 50% or more, respectively.

The international figure is the hardest to model. The request from UUK that a form of student number control is re-introduced (up to 5% of student numbers from last year) is a welcome attempt to stabilise the sector. However, this will likely lead to the highest volumes in clearing we have ever seen.

The request for additional funding to support small, specialist institutions – and also high cost disciplines – is similarly important. But there will be serious questions about the viability of courses, departments, and entire universities unless the government is able to step in.

Given that universities are at the forefront of the public health and research fight against the virus, it would be particularly inexplicable not to rescue them when they are needed the most.

Lessons for the future

Lessons can, and should, be learnt from every crisis.

When we are able to move away from the short and medium term challenges, there will be salient considerations for our universities which we should not shy away from.

Universities have already shown remarkable agility in moving teaching online, and making preparations for online assessment. I know of several universities where attendance and satisfaction in online teaching over the last few weeks has been higher compared to the usual face-to-face offer.

For staff, the move to remote working has also proved illuminating. Not without some challenges, but the myth that home working cannot work in higher education has proven untrue.

The crisis should also provide us with cause to reconsider our pedagogy and programme development. Most notably, demand for online programmes may be bolstered long after COVID-19 has been beaten.

All of the above presents us with a significant question: should we simply return to the old ways of operating when this is over?

Shaping the new normal

It is often said that universities are slow to change…

The last few weeks have shown that universities at all levels can rise to the challenge when the pressure is on.

Some changes may be forced onto universities over the coming months. However, there will be ample opportunity to consciously choose to do some things differently when shaping the new normal.

Let’s be prepared to embrace change in the best interest of our students, staff, and the country.

Aaron Porter is on the governing body of Goldsmiths University and BPP University.