Budget letter warns on pay

November 28, 1997

IN ITS pre-budget letter to the Higher Education Funding Council for England this week the government promised that an extra Pounds 125 million for institutions next year will contain real terms cuts in funding per student to less than 1 per cent.

But it offers no guidance on funding plans for 1999/2000, to be announced in the summer, which will be at the mercy of a comprehensive government spending review. The Department for Education and Employment states only that the previous government's plans "for later years", which included big cuts in 1999/2000, should "not be adopted as a firm guide for planning purposes".

In the absence of any other indications, Brian Fender, HEFCE's chief executive, has advised institutions to plan on the basis of a steady state.

The DFEE urges a continued squeeze on pay, echoing chancellor Gordon Brown's warning against imprudent salary rises "at the cost of fewer jobs tomorrow". The letter warns "if institutions do not observe these principles, that is likely to affect adversely the level of grants to the council in 1999/2000".

A dominant theme throughout the letter is the importance of widening participation.

It reiterates the message that extra resources arising from the introduction of Pounds 1,000 tuition fees will be used to improve quality, standards and opportunities in further education, as well as higher education.

* Details, page 3

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