Empty university lecture hall with ominous shadows

In recent posts I’ve already skipped indelicately through Britain’s higher-education money-pit, tutted at missed savings, and poked the soggy bits of management. “Cheer up,” I promised. So naturally it’s time to talk about death. Not yours, happily, but the demise of an entire university – a topic so bleak it makes actuarial tables look frisky.

1. The Warning Lights That No One Reads

Contrary to tabloid folklore, a UK university cannot simply press CTRL-ALT-DELETE and vanish. The Office for Students (OfS), our sector’s all-seeing eye, monitors every provider’s cash-flow forecasts like a helicopter parent reading WhatsApp. The moment liquidity drops to roughly a month’s pocket money, OfS may slap on “specific conditions” – think: “No, you may not build another glass atrium while the payroll’s on fire.”

Should things wobble further, OfS issues a Student Protection Direction: a legally enforceable market-exit plan explaining where the students will finish their degrees once the lights go out. It is, in effect, a fire-drill for higher education, minus the jaunty hi-vis jackets.

2. Rescue Attempts Before the Undertaker Arrives

Internal surgery. Governing bodies usually start by freezing head-count, flogging spare buildings, and axing under-subscribed courses. Given that three-quarters of English universities expect deficits in 2025-26, this is becoming less “remedy” and more “morning routine”.

Tough-love funding. During Covid the Department for Education ran the Higher Education Restructuring Regime (HERR): loans with strings, the strings mainly involving painful governance reform or outright merger. HERR has now retired to the policy graveyard, but ministers still keep a bail-out defibrillator handy – heavily conditional and rarely charged.

Voluntary mergers. OfS positively encourages courtship. Universities UK even has a matchmaking task-force roaming the sector like a polite dating app. Recent hook-ups include Northeastern’s absorption of New College of the Humanities, and the serial mergers in Wales that birthed the University of Wales Trinity Saint David. Do note: under charity law this is a transfer of assets, not a sale, so no one gets a yacht out of it.

3. When the Pulse Flat-Lines: Formal Insolvency

There is, amazingly, no bespoke higher-education insolvency regime. Instead, which procedural rabbit-hole you tumble down depends on your constitutional birth-certificate:

  • Companies limited by guarantee or for-profit outfits go through mainstream administration, CVA or liquidation. Exhibit A: GSM London (2019) folded, and its students finished degrees elsewhere.
  • Higher-Education Corporations (post-92 universities) face a statutory Dissolution Order: the Secretary of State orders assets transferred to another HE provider or charity. No one has pressed this big red button yet.
  • Royal-Charter universities can be wound up only as “unregistered companies” in court – or they may politely surrender their charter to the Privy Council. Insolvency lawyers say either route would lock the campus faster than you can mutter “asset freeze”.

In all cases, once an insolvency practitioner or liquidator is appointed, management’s power evaporates faster than complimentary wine at graduation. Meanwhile, OfS hovers ready to revoke degree-awarding powers if standards slip.

4. Whose Assets Are They Anyway?

Here’s the twist: much of a university’s estate is held on permanent endowment or special trusts. Endowments, archives, the chapel, the embarrassing early portraits – all are effectively coated in charitable Teflon, untouchable by ordinary creditors unless the Charity Commission or a court approves a re-purpose. Secured lenders may still repossess student accommodation or the shiny conference centre, but the quadrangle and silver Mace are destined for another charity, not a bank’s balance sheet.

5. Students and Staff: The Human Bits

  • Teach-out or transfer. Student Protection Plans outline where learners will complete their degrees. The plan is usually dull but reassuring, much like the in-flight safety card.
  • Redundancies. Staff wages rank as preferential debts, which sounds comforting until one remembers the pension deficit lurking behind the sofa. Eligible schemes tip into the Pension Protection Fund; others hope for better reincarnation.

6. Five Things Every LinkedIn Sage Should Remember

  1. Bankruptcy is rare, not mythical. Company-form providers may use Insolvency Act tools; chartered universities need court or Privy Council theatrics.
  2. Bail-outs come with handcuffs. Expect governance reform, course closures and the odd forced marriage before any public money appears.
  3. Mergers are the sector’s escape hatch. Assets glide across under charity law, teaching continues, and everyone pretends it was always meant to be.
  4. Charitable status is an asset force-field. Endowments and heritage estates survive creditors, however ravenous.
  5. Speed matters. Once cash-days-in-hand sinks below the OfS danger zone, outside control is only a board-paper away.

And Finally… a Glimmer of Optimism

Yes, a university can die – but it usually doesn’t. More often it slims down, pairs up, or accepts a stern talking-to and staggers on with renewed purpose. The sector’s safety nets may be bureaucratic spaghetti, yet they exist precisely so that students finish degrees, staff keep lecturing, and the library cat retains employment.

So if your institution’s balance sheet currently resembles a student overdraft, worry – but not too much. Don’t be like me. Instead, pick up the phone, open the books, and start negotiating while the choice is still yours. With luck, the only funeral you’ll attend is for the CFO’s cherished vanity project – and nobody will miss that at all.