In response to a number of financial headwinds, compounded by Covid19, which HE institutions are currently subject to, the Department of Education announced measures in May to assist the sector. As part of that package, the DfE has today announced the establishment of the HE Restructuring Regime.
Whilst the FE sector now has a special administration regime and has had, for a number of years, a team based at the DfE dealing with funding and restructuring requests, neither of these two things have been available to the HE sector.
The setting up of a regime is to be welcomed and offers a dedicated team to HE providers to discuss restructuring and funding requirements. This does, however, need to be followed by an insolvency process for HE providers which clearly allows them to continue to trade with protection from creditors to achieve, with funding, what is required by the OfS.
An equivalent of the FE special administration for HE institutions would also provide clarity as to which laws and duties apply to trustees and others that are responsible for the running of HE providers in financial distress.
The current lack of clarity and options is inhibiting the decision making processes in these institutions at a time when students and creditors require strong leadership and financial assistance to protect their rights.