The ongoing COVID-19 crisis poses a significant financial risk to the UK higher education sector. Universities are facing big losses across a range of income sources and investments. These losses could cause serious financial problems, including -in the extreme -insolvency. Most institutions will be left with reduced net assets, which could increase financing costs and will leave them less well placed to cope with future adverse shocks.This briefing note examines the resilience of university finances to the likely consequences of the COVID-19 outbreak and the public health response to it. For UK higher education institutions, we estimate the likely financial losses associated with the crisis under three different scenarios, reflecting different crisis trajectories in the coming months. We assess the chances of insolvency and estimate the cost of potential bailouts to the taxpayer.Our main findings are: The total size of the university sector's losses is highly uncertain: we estimate that long-run losses could come in anywhere between £3 billion and £19 billion, or between 7.5% and nearly half of the sector's overall income in one year. Our central estimate of total long-run losses is £11 billion or more than a quarter of income in one year.
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This report is the third in a series of annual reports on education spending in England. The authors gratefully acknowledge the support of the Nuffield Foundation, which has funded this series of annual reports (grant number EDO/43355). The Nuffield Foundation is an independent charitable trust with a mission to advance educational opportunity and social well-being. It funds research that informs social policy, primarily in Education, Welfare and Justice. It also provides opportunities for young people to develop skills and confidence in science and research. The Nuffield Foundation is the founder and co-funder of the Nuffield Council on Bioethics, the Nuffield Family Justice Observatory and the Ada Lovelace Institute. The Nuffield Foundation has funded this project, but the views expressed are those of the authors and not necessarily the Foundation. For more Schools 1 School spending per pupil in England fell by 9% in real terms between 2009-10 and 2019-20. This represents the largest cut in over 40 years, but it came on the back of a significant increase in spending per pupil of over 60% during the 2000s.2 Over the 2010s, cuts in spending per pupil were lower in Wales (5%), but similar in Northern Ireland (10%). In contrast, spending per pupil in Scotland rose by 5% in real terms over the 2010s, reflecting extra funding to pay for increases in teacher pay totalling more than 10% over 2018 and 2019. Spending per pupil is highest in Scotland (£7,300), at similar levels in Wales and England (£6,100) and lowest in Northern Ireland (£5,800).3 The government has allocated an extra £7.1 billion for schools in England in 2022-23. This will increase spending per pupil by 9% in real terms between 2019-20 and 2022-23 (as measured against expected general inflation) and near enough reverse past cuts. If we account for expected increases in teacher pay, the real-terms increase in spending per pupil will be lower, at 6%. In any case, spending per pupil in 2022-23 is set to be no higher in real terms than in 2009-10.4 Secondary school spending per pupil in England (£6,000) was about 16% higher than in primary schools (£5,200) in 2019-20. This is down from a secondary/primary funding difference of 30% in 2010-11, partly reflecting large cuts to school sixth-form funding. It also continues a long-run trend, with the funding difference down from over 50% during the 1980s. Whilst empirical evidence shows high benefits to spending at younger ages, it is not clear evidence supports such a dramatic shift. 2020 annual report on education spending in England The Institute for Fiscal Studies, November 2020 9 5 The school funding system in England provides greater levels of spending to more deprived schools to help narrow the achievement gap between rich and poor. During the 2000s, the extra funding received by the most deprived schools compared with the least deprived ones grew from 20-25% in 2000-01 to 35% by 2010-11. 6 Despite the introduction of the Pupil Premium in 2011, the deprivation funding premium shrank back to 25% in 2018-...
We investigate differences in the returns to undergraduate degrees by socio-economic background and ethnicity using the Department for Education's Longitudinal Education Outcomes (LEO) data set. The LEO data set links school records, university records and tax records for everyone w ho took GCSEs in England since 2002. Using these data, we can estimate returns up to age 30. Our main findings are:• Average returns to undergraduate degrees at age 30 are positive for people from all socioeconomic and ethnic groups we study, but there is substantial heterogeneity across groups.Returns are especially high for privately-educated graduates, whose median earnings at age 30 are the highest of all groups. However, we find that the groups with the lowest graduate A1 Robustness: using IDACI instead of our SES measure 58 A2 Gender earnings gaps 59 A3 University subject choice by gender 62 A4 Age 30: unexplained gaps in earnings by SES and ethnicity 66 A5 Age 30 returns: graphs 68
In the last decade, there have been significant cuts to spending on adult education and large falls in the numbers of adult learners, particularly amongst those taking low-level qualifications. The government is planning to partially reverse these cuts as part of wider plans to improve technical education and level up poorer areas of the country. As part of these plans, the government has also pledged to introduce a Lifelong Loan Entitlement to provide all adults with an entitlement to higher education style loan funding for four years of post-18 education, which can be used flexibly across time and different types of courses. This briefing note seeks to provide context to these reforms and what we know already about their potential impact. Key findings1 There have been large falls in the numbers of adult learners and spending on adult education over the last decade. Total spending on adult education and apprenticeships fell by 38% between 2010-11 and 2020-21, with a 50% fall in spending on classroom-based adult education. The numbers of adult learners also fell significantly, particularly those taking low-level qualifications, with a 50% fall in numbers taking qualifications at Level 2 and below, and a 33% fall in the number of adults taking Level 3 qualifications. 2 Partial reverse of past cuts. The cuts to adult education will be partially reversed by an additional £900 million in extra spending in 2024-25, which includes money for a restoration of public funding for adults' first full Level 3 qualifications. However, total spending on adult education and apprenticeships will still be 25% lower in 2024-25 compared with 2010-11. 3 Full-time participation at degree level has expanded. The number of fulltime undergraduates has increased by nearly 25% since 2010. This has been facilitated by the student loan system covering tuition and maintenance costs. The number of full-time postgraduates grew by 60% after postgraduate loans were introduced in 2016. 4 Other forms of higher education have seen falling numbers. The number of (mostly mature) students on part-time undergraduate degrees has plummeted by almost 50% since 2010 and there was a 28% decline in the
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