The financial uncertainty wrought by the pandemic left a UK university forecasting that it could be left with cash reserves to cover just five days of operations.

In its , the University of Kent says that it is now in a much better position after strong domestic recruitment last autumn and other mitigating actions such as deferring some spending.

But its initial forecast on cash reserves for the end of 2020-21 would have been at the “absolute limits of acceptability”, the report says.

Without the Covid crisis Kent recorded an underlying deficit – not including pension adjustments – of £5.5 million last year. Due to high staff costs Kent launched a voluntary severance scheme two years ago that has so far resulted in more than 300 staff agreeing to leave.

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But the effects of the pandemic pushed last year’s underlying deficit to £12 million.

For the end of this academic year, the statement says that the Covid crisis had caused it to initially forecast a £31 million underlying deficit for 2020-21 and “year-end cash reserves equivalent to just 5 days expenditure; this would, ordinarily, be at the absolute limits of acceptability”.

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However, student recruitment in the autumn – as well as further action taken to stabilise finances – had helped to improve the situation; at the time of publishing the statement it was looking at reserves in July 2021 equivalent to 29 days’ worth of spending.

A Kent spokesman said that the initial forecasts for 2020-21 “were prepared on a highly cautious basis and included some extremely prudent assumptions around recruitment”.

“This was subsequently revised with an improved position at the end of December to reflect confirmed student admissions figures,” he added, saying that the latest forecasts showed a “further improvement” to 38 days’ cash reserves for the end of this year.

The English regulator, the Office for Students, says that a university must report a situation where it “considers it to be reasonably likely that its liquidity will drop below 30 days”.

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Kent’s statement says that its liquidity fell to about 21 days at the end of April 2020 before recovering to 40 days by July. The spokesman said that Kent had “complied with all our regulatory reporting requirements”.

Other universities to have published their financial accounts in recent weeks include the University of Leicester, which said that it had it had with lenders to ensure it had enough “financial headroom” if “downside” financial scenarios materialised.

simon.baker@timeshighereducation.com