University of Manchester reveals potential loss of £270 million

The University of Manchester (UoM) faces losses in excess of £270 million next year as a result of the Covid-19 pandemic.

Vice-chancellor Professor Dame Nancy Rothwell has warned that job losses and pay cuts may be required, along with “rapid and radical changes to our university and the way we operate”.

The UoM predicts a major reduction from the income earned from students’ course fees, stating that “it is possible that 80% of all international students and 20% of home/EU students will be lost”.

In a letter to all staff, Prof Rothwell said: “For our university, this could amount to a loss of over £270 million in one year.

“Thus, we are preparing for a reduction in our total annual income of between 15 and 25 per cent. This may persist into following years.”

In her letter, Prof Rothwell said that “job losses may be required”, and warned of a “pay cut for a defined period across the university”.

At over £600m per annum, pay accounts for more half of the UoM’s budget.

There is no denying that universities are facing new challenges in light of the crisis, but instead of short-sighted cuts we need the sector to pull together and make the case for vital funding to safeguard the future of our universities.

– Martyn Moss

The UoM’s Senior Leadership Team have announced they will be taking a voluntary 20% pay cut during the crisis, which will be reviewed periodically.

Prof Rothwell said that she wanted to give staff an “early and honest view of the current and likely future severe financial impacts of the pandemic”.

With an annual turnover of £1.1 billion, 45% of which comes from the tuition fees, Rothwell emphasises the need to generate a “modest cash surplus” to maintain the “fabric of the University”.

The University and College Union (UCU) said it recognised universities could face financial difficulties as a result of Covid-19, but urged Manchester to work with the union to secure government support.

UCU regional official Martyn Moss said: “We are disappointed the University of Manchester has acted with such haste to threaten these drastic measures, especially when staff have adapted so impressively to the current crisis to support students and the university.

“There is no denying that universities are facing new challenges in light of the crisis, but instead of short-sighted cuts we need the sector to pull together and make the case for vital funding to safeguard the future of our universities.

“We want all universities to work with us to secure the funding needed to ensure they are firing on all cylinders and can help lead the recovery from this crisis.

“We want to work with the University of Manchester to deal with the issues it faces locally and to protect jobs and its academic capacity.”

The Government is reportedly split on providing emergency funding to universities, which would cost at least £2 billion.