Covid-19: Universities in deficit as commercial losses climb to €270m

Universities say they are under severe financial strain with losses in commercial income set to climb to €270 million due to the pandemic.

The sector says loss in these revenue streams – such as tourism, conferences, accommodation and sports facilities – has been even greater in 2021 than 2020.

A combination of growing student numbers and additional costs linked to Covid-19 are set to push more universities further into the red, according to the Irish Universities Association (IUA).

Estimates prepared by eight universities – DCU, Maynooth University, NUI Galway, Trinity, UCC, UCD, University of Limerick and TU Dublin – indicate a combined projected deficit of €40 million in the current academic year.

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They say these deficits are net of significant cost containment and mitigation measures which have been applied across all universities.

It says such measures to address short-term financial pressures are generally not in the long-term strategic interests of universities and pose real risks for the longer-term impact on quality and sustainability.

“Universities will continue to find cost efficiencies where necessary but, even if desirable in the context of recovery, the capacity for savings is limited as salaries are largely determined by government and service demands continue to rise due to demographic growth.”

The IUA has called on the Government to substantially increase investment in higher education and research as part of a post-Covid and post-Brexit national recovery.

The association has outlined a range of proposed measures in a €900 million-plus package which includes extra core funding and a capital expenditure programme for the sector.

The Department of Further and Higher Education has said it has increased funding significantly to the wider education sector

It includes a new €225 million “national recovery” investment for further and higher education in the areas of upskilling and research, along with a €105 mullion fund for safe reopening of third level.

However, Ciarán Ó hÓgartaigh, chair of the IUA and president of NUI Galway, said now is the time to expand core funding given that a EU-sponsored study on the future funding of higher education has been received by the Government.

"An Taoiseach and Minister Simon Harris have given their strong support for increased investment in education and research as the bedrock of Ireland's continuing development as a society and sustained competitiveness as an economy," he said.

Digital capacity

“For this generation of students, it is imperative that this generation of political leadership now act on the recommendations from that study consistent with the commitments in the Programme for Government and make a step-change investment in the sector in Budget 2022 after decades of under-funding.”

Among the areas where the IUA is urging additional funding include measures to boost the digital capacity of colleges, a “green campus” initiative to help tackle climate change and inclusion measures aimed at boosting participation among disadvantaged students.

It also says funding is needed for skills development, research and innovation, as well as promoting Ireland as a destination of choice for international students .

IUA director general Jim Miley said the higher education sector has a pivotal role to play in national recovery as producers of the talent and innovation pipeline for the economy.

“We have seen the proven value of advanced knowledge, research and science during Covid,” he said.

“The sector is now ready to play its part in the recovery. Investment in both the talent and innovation needs of the country is fundamental to the successful national recovery now and into the future.”