Capping the number of students who can attend each British university will not stave off the financial catastrophe that institutions face following the coronavirus outbreak, a report from the University and College Union (UCU) warns. The report forecasts the sector could lose around £2.5bn next year in tuition fees alone, along with the loss of 30,000 university jobs, based on gloomy predictions of international and domestic students staying away if Covid-19 continues unchecked. The government is negotiating with the university sector to limit the number of students each institution can admit in September, in the hope that it will help some avoid cutthroat competition and possible bankruptcy if their student intake slumps. But the report, commissioned by UCU from London Economics, says a cap could be ineffective if more students are prepared to sit out next year. The consultancy’s forecasts show even the likes of Oxford and Cambridge seeing falling numbers of undergraduates entering from the UK and abroad. “Our world-renowned universities are doing crucial work now as we hunt for a [Covid-19] vaccine and will be vital engines for our recovery both nationally and in towns and cities across the UK. It is vital that the government underwrites funding lost from the fall in student numbers. These are unprecedented times and without urgent guarantees, our universities will be greatly damaged at just the time they are needed most,” said Jo Grady, the UCU’s general secretary. Rebecca Long-Bailey, the shadow education secretary, backed the call for greater government support. “UK universities must be valued as part of the frontline response to the coronavirus pandemic, supplying students to the NHS and conducting world-class research into the virus,” she said. The report suggests that universities could lose £1.5bn in international student fees, more than £600m from UK-based students, and £350m from students from the EU, based on surveys of students’ intentions, including one conducted for Ucas, the admissions service. Gavan Conlon, a partner at London Economics, said the pandemic will result in a “very substantial loss” in enrolments and income, requiring significant government support. “The proposed student numbers cap will not be enough to avoid an overly competitive market for the remaining pool of applicants, with the impact of this actually being worse for some institutions than the effect of the pandemic itself,” Conlon said. But Nick Hillman, the director of the Higher Education Policy Institute, said he thought the report’s forecasts for students numbers – particularly a 16% drop within the UK – were overly pessimistic. “I do not want to underestimate the severe impact of Covid-19 on higher education. But, given the diversity of our higher education sector, we must ask if it is right for modelling to assume every single institution will face a recruitment crisis across the board,” Hillman said. London Economics’ forecasts did not include the £790m lost in accommodation, catering and conference income identified by the Universities UK group of vice-chancellors in its recent submission to UK governments calling for at least £2bn in bailout funding. “The union is absolutely right to warn of the knock-on impacts this would have for jobs, regional economics, local communities and students,” said Alistair Jarvis, the chief executive of UUK. “Government must take urgent action to provide the support which can ensure universities are able to weather these very serious challenges, and to protect students, maintain research, and retain our capacity to drive the recovery of the economy and communities.”