The higher education minister has not ruled out that some universities may be forced to close over the funding crisis facing the sector.

Former home secretary Baroness Jacqui Smith, who Sir Keir Starmer appointed as minister for higher education in his cabinet, told the Politics Hub with Sophy Ridge that universities should be “looking at how they can run efficiently as possible”.

Universities are currently facing a funding crisis due to a drop in student applications and restrictions that prevent international students, who pay higher fees, from bringing their partners and children with them.

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Bridget Phillipson, the education secretary, has said universities should seek to manage their own budgets before hoping for a bailout from the taxpayer.

Asked whether that could mean some universities are threatened with closure, Baroness Smith replied: “I don’t want that to happen. And I’m concerned that students are still able to get those opportunities.”

Pressed again on whether some higher institutions could close their doors, the minister said again: “I hope it doesn’t happen.

“And, you know, that’s what we need to work to try to avoid.”

She said it was “in the hands of universities to take the action necessary in order to be as efficient as possible”.

“I want to work alongside them in order to make sure that our higher education sector, which is internationally recognised, it’s one of the key enablers in this country for individuals and for the economy,” she added.

“I want that to work successfully, and I’m willing to work in partnership to ensure that that happens.”

Last year, the Home Office announced that international students who come to the UK will no longer be able to bring family with them except under specific circumstances.

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The curbs have been in force since January and mean overseas students are no longer able to bring dependants with them unless they are on postgraduate courses that are designated as research programmes.

Conservative ministers, who were looking to lower migration numbers to the UK, said at the time that the restrictions would see 140,000 fewer people come to the UK each year.

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Earlier, Ms Phillipson said a “sharper focus” was needed on regulating the higher education sector to ensure that universities were “on a firm footing” financially.

She said universities were “autonomous” and there were “expectations around how they manage their budgets, and I would expect them to do that without seeking any calls on the taxpayer”.

But the University and College Union (UCU) has called on the government to take action to help universities across the country who were struggling with their finances.

In a letter sent to Labour on Friday, Jo Grady, general secretary of the UCU, warned: “Anything short of an emergency rescue package for the sector will be insufficient to stave off catastrophe.”

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Susan Lapworth, chief executive of the Office for Students, the higher education watchdog, said a recent analysis it had conducted showed “increasing financial risks” facing the sector.

“These risks include the decline in the real-terms value of tuition fees, an over-reliance by some institutions on international students, and misplaced and unrealistic optimism about student recruitment,” she said.

“We are not expecting an increase in the number of institutions exiting the market in the short-term.

“But all universities should carefully consider the sector-wide risks, and ensure they are taking steps to secure their long-term futures.”

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