LONDON: For many years the idea of a university going bankrupt has seemed impossible. But senior academics are warning that some universities could easily go the way of failed music retailer HMV — and leave a huge dent in the image of British higher education.

Data on the number of new students accepted in universities for the 2012-13 academic year, released by on Friday, revealed that a large number of institutions suffered a drop in numbers compared with the previous year. But some modern universities took a disproportionate beating.

Student numbers at the beleaguered London Metropolitan University, which has undergone serious subject cutbacks, were down a huge 43 per cent. They were down 20.4 per cent at the University of East London, 18.4 per cent at the University of Cumbria, 16.3 per cent at the University of Central Lancashire, 16 per cent at Liverpool Hope University and 15.6 per cent at the University of Lincoln.

The chair of Ucas, the universities admissions body, Prof Steve Smith, told a British Council conference in Tokyo last week that following the introduction of higher fees and the unleashing of a real market in higher education, “there is the risk of market failure for institutions”.

Smith, who is vice-chancellor of Exeter University, warned that if one or more universities did go bankrupt it could cause serious reputational damage to all British universities.

Many university heads say they were planning for a potential fall in demand in the first year of higher fees — and most have a decent surplus to cushion the blow. However, many were also banking on a healthy bounce back in the coming academic year, which, the latest application figures suggest, is not going to come. Senior academics warn that universities which suffer a substantial decline in student demand for two or three years could collapse.

By arrangement with the Guardian