University of Northampton refuses to reveal risk rating of £230 million campus loan in case there is ‘unjustified press interest’

GV of the University of Northampton, Park Campus.'TERM-TIME, LEI.'070504SL10
GV of the University of Northampton, Park Campus.'TERM-TIME, LEI.'070504SL10

The University of Northampton has refused to say how risky the loan for its new campus is on the grounds it would “give its competitors a commercial advantage” and “generate unjustified press interest”.

The university is the first in the country to have a bond, which totals £230 million, guaranteed by the Treasury.

Boughton Green Road, University of Northampton.'Launch of Hot House, a new marketing agency at uni business school.'Nick Petford (Vice Chancellor). ENGNNL00120130129172352

Boughton Green Road, University of Northampton.'Launch of Hot House, a new marketing agency at uni business school.'Nick Petford (Vice Chancellor). ENGNNL00120130129172352

The money will be used to fund the university’s move to a new campus in the town centre and will be paid back over the next 40 years using its income, which was £109 million last year.

As a result of the large level of Government-backed borrowing, the Higher Education Funding Council for England (Hefce) has place an ‘observer’ on the University of Northampton’s board of governors.

However, in response to a Freedom of Information request to release copies of any Hefce risk assessment letters it had received, a University of Northampton spokesman said releasing the information would result in competitors having a commercial advantage.

The spokesman said it may also result in “misinterpretation within a news story”.

GV of The University of Northampton, Avenue Campus. 'TERM-TIME, YVONNE.

GV of The University of Northampton, Avenue Campus. 'TERM-TIME, YVONNE.

He added: “It would also inhibit the flow of information, guidance, and other communications to and from HEFCE.

“A release would also generate unjustified press interest which would divert management time away from the structured project planning for a campus move and misinterpretation within a news story may potentially lead to an impact on recruitment.”

Hefce has also refused to release its risk assessment on Northampton, as to do so “would give a commercial advantage to competitors”.

In an opinion column in the Times Higher Supplement, Professor Nick Petford, vice chancellor at the University of Northampton, said he knew that some staff were “nervous” about the borrowing, but said he believed traditional means of financing, such as bank loans, were “no longer up to the job.”

He said: “In this age of austerity, which looks set to continue whatever the outcome of the general election, traditional ways of project financing are no longer up to the job.

“There is a growing need for institutions to explore alternative funding methods, whether that be small-scale crowdsourcing or large-scale debt financing.

“Embracing new modes of finance is not without risk: something the Higher Education Funding Council for England has recognised in recent revisions to its financial memorandum for universities – and, specifically, the mutually agreed option to place an observer on our board. But when set against the levels of borrowing considered the norm in the commercial world, UK universities still look timid.

“I know that some people at my university are nervous. But our decision was made following extensive research and specialist independent verifications by financial experts, supported by Hefce.”