Disappointment greets Budget announcement

April 23, 2009

  • No new money for places or research
  • Universities must fight for grants
  • Savings demanded from research councils and institutions
  • £50m for Technology Strategy Board

Any hope that more money may be made available for additional student places and scientific research in the 2009 Budget has been dashed after the Chancellor delivered what is being described as an “extremely disappointing” settlement for higher education.

Instead of receiving a funding boost, universities will be asked to compete for grants as part of a £400 million savings package announced by Alistair Darling.

The savings demanded in 2010-11 by the Department for Innovation, Universities and Skills come on top of £1.9 billion in savings already announced in 2007’s Comprehensive Spending Review.

In addition, the Higher Education Funding Council for England has been ordered by the Chancellor to introduce an element of “contestability” into some areas of funding.

The £400 million in efficiency savings in further and higher education is expected to be found through the “use of benchmarking data; greater contestability, particularly in commissioning new programmes and services; reduced expenditure through lower than previously expected rates of inflation and the strategic reprioritisation and re-phasing of programmes”.

Les Ebdon, vice-chancellor of the University of Bedfordshire and chair of the Million+ think-tank representing new universities, said: “It is disappointing that the Government thinks that introducing contestability into university funding is an efficient way of achieving the cuts that are being imposed.

“Universities will have to bid for small jam-jars of money that are currently part of their funding council grant. This will be more expensive, administratively inefficient and unlikely to improve the student experience.”

He added: “The Government’s long-term strategy of promoting aspirations is about to unravel because the Chancellor has not provided funding for the thousands of additional students who are applying to university to improve their life chances post-recession.

“This contrasts sharply with the US, where President Barack Obama’s fiscal stimulus package includes higher education.”

Although the Budget maintains an existing commitment to ring-fence the science budget, DIUS had reportedly sought a £1 billion increase in funding for scientific research as part of a stimulus package designed to use science to boost the economy.

Instead of this, research councils will be required to make £106 million in savings, which will then be reinvested elsewhere in their portfolio “to support key areas of economic potential”.

Nick Dusic, director of the Campaign for Science and Engineering, said the proposal put forward by Lord Drayson, the Minister for Science, to align academic research with the UK’s industrial strengths had “gone forward, but without any new money”.

He added: “This is an extremely disappointing Budget. I don’t know where research councils are expected to find the extra funds. Other countries are investing more in research, while we are just moving money around.”

Although research funding has not increased, funding for priority technology areas has.

The Government has promised to set aside an extra £50 million for the Technology Strategy Board (TSB) – the government agency that, in supporting business innovation, acts as a research council for industry – as part of a new £750 million Strategic Investment Fund.

“[The money will] enable the TSB to increase its capacity to support innovation in areas that have high potential to drive future growth, such as low-carbon technologies, advanced manufacturing and the life sciences,” the budget documents say.

Paul Wellings, chairman-elect of the 1994 Group of small research-led universities and vice-chancellor of Lancaster University, said: “If this cut in the DIUS budget leads to a reduction in the unit of resource for teaching or research, it will be destabilising for the sector and damaging to the country’s chances of economic recovery.

“Cutting higher education funding during a recession is the complete opposite of what the country needs.”

Rick Trainor, president of Universities UK, said: “The additional £400 million cuts identified by the Treasury as efficiency savings for DIUS will be very challenging for the sector.” But he added: “This Budget’s commitment to improving the UK’s skills base during the current downturn is welcome. Universities will play a key role in delivering on areas such as green technology, creative industries and life sciences, identified as priorities by the Chancellor.”

melanie.newman@tsleducation.com

Editor's note

John Denham, the Universities Secretary, has written an open letter to the sector about the impact of the 2009 budget. You can read the letter here:

www.dius.gov.uk/about_DIUS/budget2009

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