National Union of Students will go bankrupt in spring 2019, leaked documents reveal NUS is set to be in almost £3m of debt by June 2019

The National Union of Students will go bankrupt by the Spring unless it undertakes serious measures to raise money to drag itself back from the brink, documents leaked to i reveal.

The student body needs to find £3m to avoid insolvency but there are serious concerns within the organisation over immediate cash flow and being able to cover day-to-day costs.

It has also been suggested that NUS chiefs are looking at making up to a third of staff redundant in a drastic bid to cut costs.

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According to a review of short-term cash flow from earlier this month, cash in hand is expected to drop to -£39,000 in April, and -£2.9m by June 2019.

Financial situation

The organisation had access to a £500,000 overdraft facility but it expired on 5 November, and at the time of the report being written it had not been renegotiated.

In a sign of how tight the finances are, the report from the Turnaround Board even suggests “putting restrictions on travel and subsistence, to minimise discretionary expenditure”.

We are projected to post a significant deficit this year without enough resource to cover the loss Shakira Martin

Perhaps of even greater concern is that the group has pension liabilities of around £12m.

Serious questions are now being raised over the governance of the NUS after a trustees report from 2017 and signed off at the annual conference in the Spring said they had “no concerns” about the financial future of the group.

The financial problems come after a series of bad investment decisions made by the board over the last five or six years, which has led to losses of around £6m.

Increased competition in the student discount market has also led added to pressures on its budget.

Lack of funds

The news follows a letter sent to all members at the start of November, which raised the severe fiscal challenges the student body was facing.

“The NUS group is facing financial difficulty,” the letter from national president, Shakira Martin, and the acting chief executive, Peter Robertson stated.

“We are projected to post a significant deficit this year without enough resource to cover the loss.”

There are also concerns the charitable arm of the NUS, which helps student unions around the country to offer support services to students, will struggle to provide its services.

Funding for the charity comes from a donation made by the NUS centrally, usually around £1.7m a year, but doubts are being raised that the money will be found.

<h2.’Difficult scrapes’

Labour MP and former NUS president Wes Streeting said: “NUS has gone through difficult scrapes before and will come through this again.

“The most important thing now is that NUS’s constituent members, students’ unions, step up to support the NUS leadership as they take tough decisions to bring NUS’s finances back under control.”

A NUS spokesperson said: “We can confirm that NUS is taking measures to address a number of governance-related challenges. The boards, officers and executive team are agreed that we need to deliver fundamental corporate, democratic, and financial reform by Summer 2019.”