Cambridge University seeks financial help
The UK’S wealthiest higher education institution stands to lose millions of pounds in pandemic
Camilla Turner
CAMBRIDGE University, the UK’S wealthiest higher education institution, is seeking financial help from the Government, its vice-chancellor has revealed.
The 800-year-old university is facing losses running to hundreds of millions of pounds as a result of the pandemic, Prof Stephen Toope said.
Even in the best-case scenario, the university can expect a “significant financial detriment” as a result of disruption caused by Covid-19, he added.
In an email to Cambridge staff and students, seen by The Daily Telegraph, Prof Toope explained that the university is “actively seeking Government support” so it can avoid taking various “unpalatable” measures such as pay freezes and voluntary pay reductions.
Cambridge is the richest university in the UK, with a multi-billion pound endowment fund as well as vast holdings of land and assets.
The central university’s fund is valued at £3.4billion, according to its most recent annual accounts. Cambridge holds total reserves of over £5.2billion which includes the value of fixed assets such as buildings, its latest accounts say. The university has an annual expenditure of £2.3billion, of which £1.1billion is spent on staff costs.
In addition, each of its 31 colleges has endowments, land holdings and assets which are collectively worth several billions. Trinity, its wealthiest college, holds over £1.2billion in reserves.
Prof Toope told students the university is expecting a drop in the number of international students – whose high tuition fees are used to subsidise research and other teaching costs – well as a drop in research funding.
The value of the university’s endowment is expected to fall, he explained, and pension contributions will rise due to the decrease in value of the fund. The university is also preparing for a decline in the income it receives from its commercial operations including the publisher Cambridge University Press.
“Even a downturn that resolves itself swiftly, with a relatively quick return to business as usual, would cause the Collegiate University a reduction in cashflow of several hundreds of millions of pounds,” Prof Toope said.
“An extended downturn, with longlasting economic effects, would require significant changes academic University.”
He said the university wants to avoid resorting to pay freezes and redundancies, adding: “So we are actively seeking government support, while at the same time identifying potential, and significant, operating cost savings.”
In April, Universities UK, which represents British vice-chancellors, demanded a £2billion bailout as they said that without a cash injection some institutions face “financial failure”.
Earlier this month, Cambridge University announced that all lectures will be online next academic year due to social distancing requirements.
When asked about this by MPS on the Liaison Committee, the Prime Minister said he hopes all universities understand that face-to face tuition is “preferable”, adding it is “important for their students and for social justice”.
Mr Johnson also said he would “come back” to calls for every studentworking in the NHS during the pandemic to have their tuition fees reimbursed for at least one academic year.
♦ A fifth of British universities bought over £700,000 worth of cars for their vice-chancellors, a report says. Information obtained by the Taxpayers’ Alliance shows 29 universities spent £702,057 on vehicles for vice-chancellors and other senior executives over the past three years.