English universities at risk of financial collapse will receive significant government assistance only if they agree to merge or to accept a ¡°further education future¡±, vice-chancellors have predicted.

While some university leaders are optimistic that last week¡¯s raft of measures, including the advance payment of ?2.6?billion in tuition fees and ?100?million of research funding, was an interim ¡°stability package¡± ahead of a larger bailout for institutions, others are less confident.

Some fear that the reintroduction of student number controls ? which allow universities to recruit 5?per cent more this autumn than they did last year ? signals the Treasury¡¯s intention to intervene far more in higher education, which might include denying some institutions access to research funding.

¡°It¡¯s clear that some institutions will be moved to a further education future,¡± meaning that they become teaching and vocationally focused, with little or no time devoted to research, one vice-chancellor told Times Higher Education.

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David Green, vice-chancellor of the University of Worcester, said the ¡°big news¡± from the government¡¯s 4?May was its stated wish that any financial support would come with ¡°attached conditions¡± and a ¡°restructuring¡± assessment.

¡°It shows its intention to become much more directing in its engagement with universities,¡± said Professor Green, adding that the government had previously ¡°steered away from this approach because it is not very good at?it¡±.

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While many universities would need ¡°pretty big cuts in teaching and research staff¡± as a result of the coronavirus crisis, such action would not be enough to save some institutions, which would be forced to merge as a condition of receiving extra funding, said Professor Green.

¡°There will be a few mergers where there are good structural reasons, and some pre-1992 universities may even end up merging with post-92 universities,¡± he explained, adding that there were a ¡°few obvious candidates¡±.

¡°It would depend on the appetite of the pre-92 university to get serious about widening participation,¡± continued Professor Green. ¡°It could be a great opportunity to make a serious commitment to student access and providing vocational education with a research emphasis.¡±

Adam Tickell, vice-chancellor of the University of Sussex, also expected some smaller universities to merge because international student recruitment was likely to be ¡°really, really down¡±. Overall, UK universities faced a total loss of between ?3?billion and ?5?billion next year, he estimated.

¡°That is a big chunk of money for universities to lose, and even those who are least exposed will feel the impact,¡± said Professor Tickell, who added that a recent London Economics report was ¡°probably right¡± in its forecasts of 30,000 overall job losses in universities and a ?2.6?billion income hit.

¡°If you are taking that amount off a sector, the consequence is likely to be the institutional failures that you see in the US, where it is routine for places to close each year.

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¡°Mergers are a potential route [for survival], but they are not a get-out-of-jail-free card. Tough choices will still need to be made,¡± continued Professor Tickell, who stressed that Sussex was not considering a merger, although it has announced a voluntary severance scheme.

Some institutions might also lose access to research funding, Professor Tickell said. ¡°There will be a much more managed research ecosystem, which I?would regret because one of the reasons we are brilliant on research, in global terms, is that so many places are doing it,¡± he said.

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However, Sir Steve Smith, vice-chancellor of the University of Exeter, said he believed that last week¡¯s package was just the ¡°first step¡±, having secured student number controls that brought some stability to institutions.

¡°Without it, institutions with weaker admissions could have been in serious trouble,¡± said Sir Steve, who viewed the creation of a task force to examine research funding as a sign that the government was still receptive to providing additional support for research.

¡°The future prosperity of the UK depends on having a strong university research base, which is subsidised by international student income,¡± explained Sir Steve, adding that ¡°no?one in government wants to jeopardise this¡±.

¡°But time is now of the essence,¡± he continued. ¡°We need clarity in the next few weeks to avoid making decisions that no one wants to make.¡±

Graeme Reid, professor of science and research policy at UCL, agreed, saying that last week¡¯s interventions were always likely to be a ¡°stabilisation, rather than bailout¡±.

¡°It will only be the first step, and there will be more to come when the shape and scale of the financial problems facing the sector become clear,¡± said Professor Reid.

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¡°The Treasury will, however, recognise that there are good reasons for stabilising the sector because universities will play such a key part in economic and social recovery,¡± explained Professor Reid. ¡°We will be in one hell of a mess if we do not have universities in decent shape when we come out of this.¡±

jack.grove@timeshighereducation.com