The global economic downturn has wiped at least £250m from the leading British universities’ endowment funds, a Guardian survey has revealed.
The universities of Cambridge and Oxford, whose endowments were valued at £907m and £680m respectively in July, are understood to be the biggest losers. Cambridge’s fund plummeted £84m in the year up to July – before the credit crunch began to really bite – prompting fears that the worst is yet to come.
The plunging value of the funds comes as universities face unprecedented hikes in their wage and fuel bills alongside squeezed public funding. One senior vice-chancellor warned that the cutback in government spending on universities would be the worst in 25 years.
The survey of the 20 members of the Russell group of research-intensive universities showed nearly all have already lost millions in the downturn. All but three gave a measure of the performance of their funds. The losses declared so far add up to £190m with most institutions acknowledging there are more to come.
Phil Harding, chair of the British Universities Finance Directors Group, said: “It has undoubtedly got worse as the last six months have progressed. Finance directors are getting more and more concerned about how deep the impact is going to be and how prolonged.”
Universities are separately predicting severe funding cuts next year as the government shifts spending to deal with the fallout of the recession. A pay deal for lecturers promised to meet the retail price index for this year, which is unexpectedly high and adding to their woes.
The Russell group’s director general, Wendy Piatt, said: “Russell Group universities are less reliant on endowments than US institutions and we derive our income from a variety of sources. Nevertheless, we will be subject to some extremely difficult economic conditions with income streams under threat, costs increasing and international competition escalating … our research-led institutions have a crucial role to play in helping the UK survive the economic downturn and stimulate a recovery.”
Source: The Guardian