Budget brings limited benefits

The budget offered little hope of extra cash for universities, which are already being tempted into closer links with the private sector.

In what was clearly a pre-election vote-winning budget, chancellor Gordon Brown restricted help to higher education to a number of tax reductions, credits and enterprise funds aimed at encouraging research and development and high-tech industry.

Out of Pounds 1 billion extra for education next year, about Pounds 950 million will go to schools in England, Scotland, Wales and Northern Ireland. As The THES went to press, a Whitehall source said there would be little for post-16 education. Education secretary David Blunkett was due to give further details yesterday.

The massive Pounds 23 billion investment in the NHS over the next three years will benefit universities, particularly those with teaching hospitals or involved in nurse education.

Many in higher education had hoped that there would be some indication of additional money for further education, university teaching and for academic pay,even if precise figures would have to wait until the outcome of the second comprehensive spending review, which is due in July.

David Triesman, general secretary of the Association of University Teachers, said: "I think this shows universities are being driven inexorably towards the private sector. As we saw in the budget, all the incentives were under the commercial rubric. There was nothing flowing the other way."

The budget did provide a raft of measures that will benefit universities with spin-off companies and links to external companies. Capital gains tax will be cut to 10p in the pound after four years. There was also full tax relief for IT investment, new regional venture capital funds and an R&D tax credit for small and medium-sized businesses worth Pounds 150 million.

Reforms to charitable giving will benefit alumni and corporate donations to universities, currently worth about Pounds 300 million a year. FE colleges will benefit from the extension of the education maintenance allowances and the New Deal for adults.

Shadow education secretary Theresa May said: "We did not expect announcements on higher education, but then neither did schools and they received a welcome Pounds 1 billion."