£15 billion needed to hit targets

November 30, 2001

UUK has given the government the 'formidable bill' required to develop higher education up to 2010 and to reach 50% participation. THES reporters investigate.

Universities need nearly £15 billion to meet the government's higher education targets, it was claimed this week.

The extra money, totalling £14.36 billion, is set out in Universities UK's submission to the 2003-04 to 2005-06 comprehensive spending review published yesterday.

It is close to double this year's total public funding for higher education, some £8 billion, and almost three times as much as UUK's submission to the last CSR, covering up to 2004, which was for £5 billion.

UUK says the £14.36 billion bill is a fully costed account of what the government needs to invest if it wants to expand higher education while improving teaching and research quality.

The submission points out that Tony Blair's 50 per cent participation target will only be reached by the 2010 deadline if universities succeed in recruiting and retaining more people from poor backgrounds (see pages 5 and 8).

At the same time it points to the chronic, long-term underfunding of teaching and research. There are demands for more money for better academic pay, new buildings, building repairs and replacement of ageing equipment.

Tony Bruce, policy director for UUK, said: "It is a formidable bill... and the scale of it may come as a surprise to government. But the bill is directly related to government objectives. If investment needs are not met, it does call into question whether the targets will be fully met."

Mr Bruce said there was concern over a potential clash between the CSR submission and the review of student support being conducted by the Department for Education and Skills and the Treasury. A working group is looking at student tuition fees, loans and grant support. There are fears that the balance of upfront fees, loans and limited grant support could be deterring the poorest students from higher education.

Mr Bruce said that the £350 million to £400 million contributed annually by fee-paying undergraduates was an important component in university funding and that universities would be concerned if the government decided to dispense with fees.

The results of the DFES and Treasury review of student support are due in the new year. Mr Bruce said that it was unclear how the results would affect CSR deliberations on higher education, the results of which are not due for publication until the summer.

UUK expressed concern in its submission about matched funding initiatives for teaching and research capital funding. It wants an end to the process where public funding through schemes such as the Science Research Infrastructure Fund must be matched with at least a partial contribution from institutions.

The submission says that the latest financial forecasts show that the sector as a whole is in deficit for 2000-01 and 2001-02. This means that many institutions no longer have the capacity to redirect resources internally for matched funding.

Vice-chancellors are aware of the scale of their demands and so they have split the total bill.

The bill for the forthcoming spending review covering the three years from 2003-04 to 2005-06 is £9.94 billion. The remaining £4.42 billion is aimed at the subsequent spending review covering 2006-07 to 2008-09.

The recurrent funding bid for 2003-04 to 2005-06 is £5.52 billion. This includes:

* A £1.2 billion rise or uplift to cover inflation

* £1.23 billion for staff pay and development

* £1.26 billion for on-going replacement and renewal of buildings and teaching and learning resources

* £840 million to recruit and retain high-quality researchers and to meet the additional costs of an increase in the numbers of academics working in 5 and 5* rated departments in the forthcoming research assessment exercise

* £485 million to meet the government's 50 per cent participation target by 2010 - UUK calculates it will have to recruit and retain an extra 30,000 students a year to meet the target.

UUK says it requires £450 million for "third stream" activities to help universities transfer knowledge and technologies to local companies and communities, and £60 million to meet the additional costs of training more doctors, nurses and health professionals.

The capital funding bid for 2003-04 to 2005-06 is £4.42 billion. This includes:

* £2.65 billion for upgrading teaching infrastructure, including new buildings, replacing and repairing buildings and replacing computers

* £1.77 billion for research infrastructure to maintain a globally competitive position for UK research by, among other things, helping to bridge the widening gap between the volume of research and research-council funding, and helping to recruit and retain PhD students through improved stipends and more attractive employment contracts.

The submission notes that public expenditure on research and development has declined in real terms by 21 per cent since 1986-87 and that, after Japan, the UK government spends less than any other developed country on research and development.

The remaining £4.42 billion, deferred until the subsequent CSR, covering 2006-07 to 2008-09, is all capital funding. Of that, £2.65 billion is needed for teaching infrastructure and £1.77 billion is for research infrastructure.

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