SOAS University of London to slash budgets and cut staff amid coronavirus crisis
The college has seen lower numbers of students taking up offers for courses
SOAS University of London plans to cut budgets and lay off a significant number of staff as it struggles to deal with the economic fallout of the Covid-19 pandemic.
The university, formerly known as the School of Oriental and African Studies, is seeing a significant number of students not take up offers for placements compared with previous years because of the coronavirus outbreak. Graduate enrolments have been at their lowest levels since 2012.
An investigation by The Guardian newspaper revealed staff at the university fear the institution could be a takeover target, despite denials of merger rumours.
“SOAS is taking decisive action now to ensure we can continue to provide an excellent student experience to our new and returning students," a university spokesperson said.
“Our Board of Trustees has approved the accounts with SOAS as a going concern. Our auditors have made a statement about material uncertainty around future income from student recruitment in the context of Covid-19 … These are sector-wide, not SOAS-specific risks. Proposals are being developed to be implemented by September 2020 and will be subject to consultation.
“We are modelling a range of scenarios in relation to the anticipated impact of Covid-19 on upcoming student recruitment which could reduce our income by between £8-16 million.
“We have no plans to merge with another institution.”
The university’s latest financial statements show it is carrying multi-million pound deficits – accounts for 2018-19 revealed a £19.1m (Dh 86.6m) deficit, but excluding changes in pension liabilities, the annual deficit was £6.2m, driven by a £2m drop in tuition fees from UK and EU students.
Adding to this, the university’s auditors warned earlier in May that difficulties recruiting more students during the pandemic meant “a material uncertainty exists that may cast significant doubt on the school’s ability to continue as a going concern” over the next year.
One SOAS academic told The Guardian that senior management had “been unable to make significant changes over the last few years, and now it has ended in a big crisis. This is a serious failure of management.”
A “highly confidential” email from SOAS interim director Graham Upton, leaked to the press on May 6, said that “recurrent deficits have posed a severe threat to our long-term financial sustainability”.
“We have to change our basic operating model, if we are to achieve the financially sustainable position which is required of us as an institution in UK higher education. This is our financial and regulatory reality. More recently, the impact of Covid-19 has put our finances under even greater pressure,” Mr Upton said.
“The school is structurally unprofitable, having run deficit budgets for the past three years with a fourth in prospect, and this has brought our cash flow to a point where our auditors have questioned whether we can be seen as a ‘going concern’."
Earlier this month SOAS sold valuable property in central London’s Russell Square for £9m to help it maintain sufficient credit from banks to remain solvent.
Mr Upton said the sale "provided a short-term solution to our cash flow problems but this is an emergency measure which does not solve our longer-term viability problems".
"Our auditors, our bankers, the Office for Students [OfS] and the board of trustees all now require a change to the school’s basic operating model.”
Updated: May 30, 2020 04:01 PM