The Government has announced details of its Higher Education Restructuring Regime (Restructuring Regime) designed to provide financial support for higher education (HE) providers in England who are at risk of insolvency because of coronavirus (COVID-19).
The Department for Education (DfE) has published a 15-page document outlining the details of the scheme, which will assess the individual circumstances of higher education providers and the case for restructuring support. The support will include last resort financial assistance, through repayable loans. Any support provided by the Restructuring Regime must be aligned with the Government’s wider priorities. The document notes that the Restructuring Regime is not intended to represent a taxpayer-funded bail-out, and it provides no guarantee against the possible failure of individual organisations.
The Restructuring Regime is intended as an avenue of last resort, and support will only be available where other financing options have been explored and exhausted and the following conditions are met:
- there is a clear economic and value for money case for intervention;
- the problems are related to COVID-19 and there is a clear and sustainable model such that as a result of restructuring the HE provider should not need further assistance;
- the failure of the HE provider would cause significant harm to society or the national or local economy, such as through the loss of high-quality research or teaching, a disruption to COVID-19 research or healthcare or the overall disruption to policy objectives including a significant impact on students.
The DfE will create a Higher Education Restructuring Regime Board, comprised of an independent chair and external experts with specialist knowledge. The Board will review restructuring proposals to determine the precise terms and conditions of the support and make recommendations to the Secretary of State for Education regarding intervention. The Education Secretary will then make a decision whether to intervene, having regard to the following policy objectives:
- protecting the welfare of current students;
- supporting the role HE providers play in regional and local economics through provision of high quality courses aligned with economic and societal needs; and
- preserving the sector’s internally outstanding science base (noting specific support is being made available for research activities).
Further guidance on the assessment process is expected to follow in due course.
The measures follow the Government’s previous announcement of support for Higher Education providers on 4 May 2020.
For further support and advice relating to the impact of COVID-19, please view our COVID-19 Advisory Service page.