Page last updated at 04:59 GMT, Monday, 19 April 2010 05:59 UK

Cumbria University got cash advance to pay staff

Students protesting in Ambleside
Plans to mothball the Ambleside campus led to student protests

A cash-strapped university came close to not paying its staff wages last month, the BBC has learned.

The University of Cumbria, which is nearly £30m in debt, had to receive a cash advance from the Higher Education Funding Council for England (HEFCE).

Union officials said when they were shown its books it looked like the university had run out of money.

The university's vice chancellor said it received HEFCE help, but now had a "credible business plan."

Earlier this year it was confirmed the university, which only opened in August 2007, was closing its Ambleside campus as part of a money saving programme.

That also saw the scrapping of plans to build a new £70m headquarters in Carlisle, cuts in courses and the loss of 200 jobs.

Watch list

The University of Cumbria is one of several institutions on an HEFCE watch-list of vulnerable universities.

FROM BBC RADIO 4

But union officials have said that the cash crisis in Cumbria is so acute it was touch-and-go last month whether staff salaries would be paid.

Dr Trevor Curnow, of the Universities and Colleges Union (UCU), told Radio 4's The Report: "We get to see the accounts and we sent them to head office and the conclusion was, 'you've run out of money'.

"My understanding is HEFCE has advanced money from next year's allowance - so we're being subbed from HEFCE."

Business plan

Professor Peter McCaffery, the university's vice chancellor, told the BBC: "Because of the deficit our cash reserves are not as great as they once were.

"We had applied to HEFCE with regard to a cash advances as far as seeing us through this particular period."

Prof McCaffery, who has been in the role for 10 months, said the university had been working co-operatively with HEFCE which was supporting its efforts to stabilise its finances.

He added: "We have got a credible business plan, approved by the board at the end of March."

An HEFCE statement said it had been monitoring the university's development since its creation in 2007. It added that it had introduced a higher level of strategic support in October 2009 when "new management and financial information indicated a deterioration in the university's financial position".

It went on: "We have supported the university in developing its new long term, sustainable business plan."

Cumbria is not alone in facing protracted belt-tightening, as UK universities face up to £1bn worth of cuts.

And the body which represents universities fears this could get worse in the next six years.

Professor Steve Smith, head of Universities UK, told the BBC: "We've had work for us done by the Institute of Fiscal Studies which says by 2015/16 the university sector could be set to lose another 20-25% worth of funding."

Describing the scenario as "pretty scary" Professor Smith added that this level of cuts would reduce the "quality, reputation and standing" of British universities.

The Report is on BBC Radio 4 on Monday, 19 April at 2000 BST. You can also listen via the BBC iPlayer after broadcast or download the podcast.



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