Yes, of course.
In asking for the forecasts, we have reinforced this year the importance of universities looking at different scenarios. So, to be looking at the demographic and maybe in the past, where there's potentially been growth in the system and universities have built that into their forecast, we have explicitly asked this year that we are provided—not just the governing body—with the scenario where there is no growth in the income. That's not the core forecast, but a scenario, so that it's quite clear how reliant the forecasts are on that growth, and if that growth doesn't come through, what the contingency plans are for ensuring that all the cost commitments can be met. And we should probably just differentiate between—we have a role before borrowings are entered into, but all the best forecasts in the world can never quite predict, certainly what's happened in the last two years, probably, in universities. So, there are significant borrowings that are now committed to and the key measures we are looking at are universities' capacity to meet their covenants and their repayments under those borrowings, because that's essential for maintaining their liquidity.
Which actually, neatly, thank you, brings me to my last question, which is: have any universities broken those loan covenants or been close to breaking them, unable to pay their borrowings as and when they fall due?
There was a significant change in accounting standards in 2015, financial reporting standard 102, so most universities had to renegotiate their covenants, but it was because the accounts were looking very different. The accounting standards brought about changes in how income was recognised and how some service concession arrangements, largely student accommodation arrangements, and pension costs, significantly, were recognised in the accounts. So, most universities have had to renegotiate covenants, but we're not aware of any who've had to renegotiate due to covenant breaches, other than one which the University of Wales Trinity Saint David disclosed in their financial statements—that they did need to renegotiate their financing arrangements, which they have done earlier this year, and they have now negotiated new covenants. It's a core part of financial management in universities now that you manage your relationship with your lender as well as with us. Breaching covenants in themselves is different to doing that with your lender being unaware and the factors being within your control. So, again, from that perspective, we have the covenants built into our forecasts, we require the forecasts to show how the university are planning to be within their covenants. The nature of those covenants vary, but most of them require a measure of cash flow, a ratio between the cash generated and the cost of debt, so there is close monitoring that is required because of the borrowing in the system, as well as our ongoing monitoring as well.