Government 'could bail out top universities if in financial danger'

The government would almost certainly bail out major British universities in financial danger, although less prestigious institutions may not be so lucky, according to a leading credit ratings agency.Moody’s, the international ratings agency, told its clients in a research note that its ratings of universities included a high probability that the government would intervene to prop up an institution in difficulty because of the potential disruption.The report comes despite Moody’s having placed negative warnings on the credit ratings of seven of the nine UK universities that have borrowed funds through international capital markets. Only Oxford and Cambridge are rated as stable by Moody’s.Earlier this month the head of the higher education regulator in England, the Office for Students, said it would not bail out universities in the future. But shortly after, it emerged that the OfS had given a loan worth £900,000 to an unnamed university at risk of running out of cash during the summer.Moody’s said the loan, which the OfS said was subsequently repaid in full, confirmed its view that the regulator and government would be more likely to offer help in the event of insolvency.