Can they build it? In the Russell Group, they can

January 10, 2013

This year will be a busy time for construction in the higher education sector as some universities begin to spend their share of the hundreds of millions of pounds that have been allocated by the government for new facilities.

This is the view of Robert Kingham, assistant director of property consultant Drivers Jonas Deloitte, who pinpointed policies that are concentrating capital investment in research-intensive institutions.

“The sector has been a beneficiary of the coalition government’s avowed aim to boost those universities which it sees as having the potential to contribute to economic growth,” he said.

The £300 million Research Partnership Investment Fund, which was announced last year, has already distributed £220 million to fund new research centres at universities across the UK.

Another £80 million of its funding is yet to be allocated.

More than three-quarters of the money already disbursed by the fund has gone to members of the Russell Group, Mr Kingham has calculated, and “this is undoubtedly where the focus of activity will continue to be”.

Another factor that is likely to drive construction this year is pent-up demand for student accommodation, which could be funded by private companies, he added.

“You have got quite a few private (investment) funds looking at student accommodation as a fairly safe place to put their money,” he said.

Some universities are drawing on their budget surpluses to fund new or improved buildings, said Mr Kingham, but he added that he did not know if this represented a trend across the whole sector.

In addition, with the initial “shock wave” of higher tuition fees having passed, improvements to university estates are moving “back up the agenda” at many institutions.

But post-1992 universities were being “left to fend for themselves” when it came to new buildings.

Overall, capital funding from the Higher Education Funding Council for England fell 58 per cent in 2011-12.

“Formula-allocated funding (is) being reduced in favour of ring-fenced and targeted funds,” Mr Kingham said.

Moreover, the majority of newer universities have found themselves “stuck between a rock and a hard place” as they try to cut estate costs without it being detrimental to their student experience, he added.

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