AT LEAST a dozen universities in Britain are facing a “very real prospect” of insolvency without a government bailout amid the Covid-19 crisis, according to research released yesterday.

The Institute for Fiscal Studies (IFS) study suggests that around 13 of the most at-risk institutions may need debt restructuring or a “very targeted bailout” worth up to £140 million to keep them afloat in the future.

These institutions may not be viable in the long run if they are left without financial support and could end up using up all their reserves by 2024, it adds.

Long-term losses across the higher education sector could total anywhere from £3 billion to £19bn — between 7.5 per cent and nearly half of the sector’s overall annual income, the report estimates.

The largest losses are likely to stem from falls in international student enrolments this year and increases in the deficits of university-sponsored pension schemes, the report says.

Universities are also expected to face lockdown-related losses of income from student accommodation and conference and catering operations, as well as financial losses on long-term investments.

The IFS research, funded by the Nuffield Foundation, concludes that the government’s response “will be critical in determining the future of these institutions.”

“Insolvency of a university could cause significant disruption to students’ education, potentially leaving them unable to complete their degrees,” the paper warns.

IFS research economist Ben Waltmann said: “With around £45bn in reserves and an annual surplus of around £2bn before the crisis, the university sector as a whole should be able to cope with substantial Covid-related losses.

“However, some universities were already in a weak financial position before the crisis hit. For around a dozen of these institutions, insolvency is likely to become a very real prospect without a government bailout.”

University and College Union (UCU) general secretary Jo Grady said: “We need a comprehensive support package that protects jobs, preserves our academic capacity and guarantees all universities’ survival.”

A National Union of Students (NUS) spokesperson said: “The coronavirus crisis has exposed many of the flaws inherent in running our education like a market.

“When funding is so unstable, it’s no wonder that our universities and the jobs of thousands of academic and support staff are now at risk.”

A Department for Education spokesman said: “We will continue to work closely with the sector to understand the financial difficulties they are experiencing at this time.”