BIS officials prepare for ‘further cuts’

Financial modelling likely to include cuts to research budget although student support most ‘vulnerable’ after 2015

November 20, 2014

Doctor at work

Wielding the blade: non-protected departments such as BIS face cuts of 33 per cent up to 2018-19

Civil servants are likely to be modelling cuts to the £4.6 billion research budget for the next spending review period, although further reductions in funding are most likely to fall on student support, according to sector observers.

Reports in the national press last week suggested that the scale of cuts after the next general election will be greater than publicly presented by the coalition government.

The Financial Times said that cuts between 2014-15 and 2018-19 could rise as high as £48 billion, rather than the £25 billion cited by prime minister David Cameron. The Guardian said that the Treasury has already asked departments to identify where £25 billion to £30 billion of cuts across Whitehall could be implemented in the two years after the current spending review period ends in April 2016.

Officials in the Department for Business, Innovation and Skills are thought likely to be modelling cuts that could touch on all areas of its budget, including research. In part, that may be an exercise in “thinking the unthinkable” to deter the Treasury from making cuts, while some BIS officials outside science may dislike how the research ring fence displaces the brunt of budget cuts on to their areas. BIS, a department unprotected from cuts, has a projected £17 billion budget for 2014-15. Non-protected departments face cuts of 33 per cent up to 2018-19 if current ring fences continue, according to the FT.

Spending that delivers growth

Nick Hillman, director of the Higher Education Policy Institute and a former special adviser to David Willetts during his time as universities minister, said: “The short answer to whether BIS officials will be thinking about further cuts is: ‘yes’. That’s part of their job planning for the future.”

Mr Hillman said leaks from BIS last year “prove some options have already been modelled but not yet implemented – like converting more [student] maintenance support to loans”.

Vince Cable, the business secretary, discussed potential future cuts at a Liberal Democrat conference fringe event last month. He said that should the policy of George Osborne, the chancellor, “prevail” in terms of the wider public finances after 2015, “which is fairly drastic cuts combined with no taxes, you would see, without doubt…that there would be a significant increase in fees, a reduction in the [student loan repayment] threshold, and the thing which would save money would be really taking a lot of money out of student support: effectively by stopping grants and turning them to loans, something of that kind”.

Mr Hillman said of the research budget: “The protection of science has come as much from the Treasury as anyone else to date, so I am sure BIS officials will be modelling a reduction in research funding as part of their work.

“However, it won’t necessarily happen because Vince Cable and his Conservative colleagues have played their hand well during this Parliament and it’s difficult to cut spending that is proven to deliver growth.”

One vice-chancellor agreed that Treasury “orthodoxy” since the days of Gordon Brown’s tenure as chancellor has been to protect science. Student support and other residual areas of the teaching budget – which include student opportunity funding attached to the most disadvantaged students and funding for high-cost subjects – “must be very vulnerable”, he warned.

john.morgan@tesglobal.com

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