Saturday, August 09, 2008

Disappearing universities: financial viability and demographic factors

Last weekend the Financial Times reported that the credit ratings agency Standard & Poor’s had warned of “certain universities ceasing to exist”.

The S&P identified the issue of changing demographics. They noted official forecasts that by 2020 there will be 16 per cent fewer 18-year-olds in the UK. (The implications of which will be felt by FE and sixth form colleges even sooner unless the government is successful in raising participation rates at 16-18.)

S&P distinguishes between “the newer, less research-oriented universities” and “leading universities”, which will continue enjoy strong demand from UK pupils.

The report expects the disappearing universities to go by merger rather than going bust. However, it is a little depressing if institutions cease to be financially viable largely through external factors no fault of their own. (Of course, badly managed institutions will go that bit sooner and with more mess!)

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