Big cuts punish poor student enrolments

March 5, 2004

Stability and consolidation were the watchwords this week as the Higher Education Funding Council for England set out how much money it will distribute to universities for teaching and research in 2004-05.

Despite the overall rise in funding for the sector, grants at almost 50 institutions have been cut or frozen. The figure rises to 75 once changes in the volume of students have been taken into account.

For some universities, the funding falls represent the continuing after-effects of poor research ratings received in 2001 that will hit fully only this year. But for most, drops in funding are the result of a failure to fill student places.

Thirteen institutions facing particularly serious cuts will receive "safety-net" grants, totalling £3.7 million, to cushion the blow.

These are Cranfield, Middlesex, London Metropolitan, Reading, Luton, London South Bank, Central Lancashire and Coventry universities, the University of Manchester Institute of Science and Technology, the London Business School, the Wimbledon School of Art, the RCN Institute and Doncaster College.

Announcing the allocations, Sir Howard Newby, chief executive of Hefce, emphasised that more money was required to properly fund the expansion of student numbers over coming years. He said: "Despite the significant funding total for higher education, there is still a need to increase the resources available so that universities and colleges can deliver the best teaching and carry out world-class research, and to address the previous underinvestment."

An extra 20,000 full-time equivalent places - including 5,000 foundation degree places to be allocated later this month - will be created from the increased teaching funding, which is up 2.9 per cent in real terms.

Factoring in the expansion in student numbers and the income raised through tuition fees, this gives a 0.3 per cent real-terms rise in spending per student. Vice-chancellors represented by Universities UK, however, said that this funding still falls short of requirements.

The apparent rise in the teaching budget shown in the tables is due to the funding council's decision to integrate the cash from the rewarding and developing staff initiative into the core teaching grant. Research funding will rise 1.5 per cent in real terms.

Cranfield's disastrous performance in the 2001 research assessment exercise caused its grant to be slashed by 9.3 per cent in real terms, mostly because none of its departments scored higher than a grade 4. The cut has been delayed from the present year, when Cranfield got an emergency handout of more than £3 million. The moderation in funding has been chopped to £990,000 for the coming year, leaving Cranfield more exposed to the financial consequences of its research performance.

Meanwhile, the Open University has turned its projected cut into a rise after expanding student numbers. It had a £1 million bailout this year, but the safety net has been removed. As the OU has turned the corner, however, its grant will rise by 0.3 per cent in real terms.

At Staffordshire University, funding will plummet 4.7 per cent in real terms next year. Funding chiefs blamed a shortfall in the number of students at the university for the cut. A similar picture is evident at the School of Oriental and African Studies, in London, and the Southampton Institute.

Once volume changes have been taken into account, there will be real-terms cuts at City, Keele, Liverpool, Sunderland, Loughborough, Durham, East Anglia, Gloucestershire, Surrey and Brighton universities.

At the other end of the scale, the University of Kent will receive a 6.1 per cent rise in its grant, equivalent to a 0.3 per cent real-terms boost once the growth in student numbers has been factored in.


  • Hefce has allocated £6 billion to 130 higher education institutions and 160 further education colleges
  • Teaching will receive £3.8 billion
  • Research will receive £1.1 billion
  • Undergraduate tuition fees will boost total income to £5.7 billion


Newcastle University's total grant is up by 4.5 per cent in real terms next year.

Christopher Edwards, the vice-chancellor, said: "We are very pleased. The figure is within £100,000 of what we predicted in our business plan and reflects the changes to the 5* rating that have benefited us enormously.

"Our income has been growing at an annual rate of 12 per cent, which has moved us from the bottom of our peer group to the top.

"But Hefce income represents only 30 per cent of our income, and I expect this proportion to fall whereas income from overseas students - which has doubled over two years to £20 million - should continue to grow.

"I also want to develop our third-strand income so we can maximise knowledge transfer, which is crucial to the local economy."

Middlessex University's total resource for 2004-05 is down by 3.4 per cent, largely because of poor projected applications from UK undergraduates.

Michael Driscoll, the vice-chancellor, said: "Over the past four years, there has been a drop in applications to London institutions of something like 40,000. This coincides with the introduction of tuition fees, and a large part of the drop in applications can be accounted for by the downturn in applications from mature students.

"Where will this wash up? In institutions with high proportions of mature students, and more than half our students are mature."

Professor Driscoll said Middlesex was compensating for the cuts by boosting overseas, National Health Service and teacher-training numbers and by relying less on the funding council.

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