Billion-pound increase in higher education cash

Universities were today awarded an extra £170 million for staff pay as part of an increase of nearly £1 billion in funding over the next three years.

On top of the additional £50 million for pay in 2001-02, which was announced in the spending review 2000 in July, universities will get an extra £60 million in 2002-03, followed by £60 million more in 2003-04.

Education secretary David Blunkett said that universities must draw up and execute plans to improve the quality of management in the sector to get the extra cash. He has tasked the Higher Education Funding Council for England with “scrutinising” these plans.

Lecturing unions have welcomed the additional money, which is to cover increases in both academic and non-academic pay. But they point out that it falls far short of the £1.4 billion cost of implementing the pay recommendations in the Bett report, especially equal pay for women.

Award strengthens unions' case

Unions are currently in dispute with the universities over this year’s 3.5 per cent pay offer. The additional money will strengthen their case for a bigger pay rise this year and next.

David Triesman, general secretary of the Association of University Teachers, claimed victory in the campaign for pay. He said: “This announcement comes not a moment too soon for universities and the hard-pressed academics at the heart of them. I shall be writing to university vice-chancellors asking for urgent meetings to discuss the best ways to spend this much-needed boost for the sector.”

Paul Mackney, general secretary of lecturers’ union Natfhe, said: “The higher education employers have absolutely no excuse now not to return to the negotiating table. Lecturers, whose wages are 30 per cent lower than comparable professions, will be expecting to see some of this cash in their pay packet.”

The extra billion will take the total higher education budget, including science funding, to nearly £6.4 billion in 2003-04. There will be an extra £412 million in 2001-02 - up from £395 million extra originally earmarked for next year - followed by an extra £268 million in 2002-03 and £298 million in 2003-04.

The increase is almost ten per cent over the three years in real terms. But universities will be expected to recruit a further 45,000 students next year, 12,000 the year after and 21,000 in 2003-04. This expansion will swallow the bulk of the new money.

Funding per student will increase, Blunkett says

The key issue for universities is the level of the unit of funding - broadly equal to funding per student. Total student numbers have yet to be finalised in each of the three years 2001-04 before the unit of funding can be worked out. Confirmation of student numbers, at least for next year, is expected later this month.

However, Mr Blunkett said today that the sector would receive a real increase in the unit of funding next year. Estimates by the Committee of Vice Chancellors and Princpals show a marginal increase of perhaps 0.6 per cent. Mr Blunkett indicated level funding per student thereafter, saying that expansion will be fully funded.

The bulk of the 45,000 extra students for next year will be primarily part-time and below degree level. It is safe to assume that most of the 33,000 more students recruited between 2002 and 2004 will also be doing part-time, sub-degree courses - many of which will be delivered by further education colleges.

Many of these extra students will recruited on to the new two-year foundation degrees. Mr Blunkett has set aside £10 million to develop the new degrees which will be available from August next year.

£60m earmarked for widening participation

Mr Blunkett wants more of the additional students to come from low income backgrounds. He said that £60 million of the extra £1 billion would be allocated over the three years to improve access for bright students from poorer backgrounds.

Expansion has raised fears in the sector that educational standards will fall as greater numbers of students are taught in crowded and outmoded lecture theatres and laboratories. The steady decline in lecturers’ pay has also raised fears that the profession has become demoralised with a resulting potential impact on the quality of teaching in higher education.

Mr Blunkett said while widening participation was at the forefront of government policies “this will not, and must not, be at the expense of standards.”

Universities already know that they are to receive an extra £1 billion for science between 2002 and 2004. This is included in the total £6.4 billion budget for 2003-04.

Baroness Warwick, chief executive of the CVCP, said: "Universities will obviously be interested to see the details behind these headline figures, particularly the government's specific targets on additional student numbers for future years.

"The new and rising funds for staff issues are particularly welcome. We are very pleased to see government has now recognised it has an important financial contribution to make towards enhancing equal opportunities and improving career and reward prospects of university staff and the management of human resources."

Total higher education funding 1997-98 to 2003-04

1997-98 : £4.7 billion
1998-99 : £4.8 billion
1999-00 : £5.2 billion
2000-01 : £5.4 billion
2001-02 : £5.8 billion
2002-03 : £6.1 billion
2003-04 : £6.4 billion