Jun 4, 2020

Without Major Cutbacks, College Could Run Out of Cash by September 2021

A confidential report shown at College Board flags a worst-case scenario where Trinity’s unrestricted cash plummets into the red by next summer.

Cormac WatsonDeputy Editor
Eleanor O'Mahony for The University Times

Trinity risks running out of cash by September 2021 if strict cutbacks – aimed at mitigating the financial impacts of the coronavirus – are not introduced in the coming months, The University Times has learned.

In the worst-case scenario, the impact of the coronavirus could see Trinity’s unrestricted cash – the amount of money College has to spend that is not tied to a specific usage – plummet into the red by the summer of 2021, according to excerpts from a confidential report presented at College Board last week.

The report – penned by the College’s Emergency Financial Management Group and obtained by The University Times – adds that “cashflow projections based on Covid 19 impacts (pre mitigations) indicate challenges in maintaining appropriate/covenanted levels of unrestricted cash from January 2021 onwards”.


It’s currently unclear what the level of unrestricted cash that Trinity is required to hold at a given time as part of its loan agreements is.

Trinity declined to comment on the specifics of the financial projections when contacted by The University Times. Media relations officer Catherine O’Mahony wrote in an email that it “is our general practice not to comment on confidential documents”.

The mitigating measures that Trinity hopes to introduce include cutbacks of €30 million on operating expenditure – including a recruitment freeze, and savings on the procurement of goods and services.

College also hopes to draw more non-EU students to Trinity by lowering the grades needed to enter as well as increasing scholarships and fee discounts.

If the mitigating measures are successfully introduced, unrestricted cash may still dip below zero by September 2021. But College expects that with the measures in place, both total cash and unrestricted cash will remain substantially higher than in the worst-case scenario and not dip below zero.

The report adds that “there is work underway with banking partners to assess additional loan facilities to safeguard liquidity”.

The Emergency Financial Management Group – set up to manage the financial risks of the coronavirus – consists of the vice-provost, chief financial officer and chief operating officer.

Meanwhile, The University Times reported today that College is looking to slash its capital expenditure by €20 million over the next 18 months through a series of budget cuts that could delay completion of its flagship Engineering, Environment and Emerging Technologies (E3) Institute and see its Law School project deferred until 2023.

Last week, the Irish Independent reported that the government had warned higher education institutes it would not cover revenue losses – totalling around €500 million – experienced by the sector as a result of the pandemic.

Officials in the Department of Education signalled support for extreme cases, in which cash flow problems are serious enough to threaten the viability of a university.

Apart from this, however, higher education institutions will be told to fend for themselves financially, through their own reserves or other financial mechanisms available to them.

Correspondence from the department to the Higher Education Authority said that there was “no commitment or expectation of additional funding for the education sector at the present time”.

“All additional costs/offsetting of revenue losses would need to be met from within existing budgetary allocations and through cost-saving measures/prioritisation of expenditure”, the response said.

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