England gets £10bn spend

January 23, 2003

Key points

  • Student numbers to increase by 23,000 by 2005 through the expansion of foundation degrees
  • £3 million to develop foundation degrees by 2005
  • Up to 70 teaching centres of excellence to be established by 2005, each receiving £500,000 a year
  • £246 million for extra research by 2005, concentrated on large 5* departments
  • Funding for the HEIF maintained at £20 million a year
  • Strategic development fund of £13.5 million by 2005
  • Partnerships for progression to receive £9 million next year

The extra cash for higher education announced yesterday will ensure the sector goes from strength to strength, according to education secretary Charles Clarke.

Between 1997 and 2006, the proportion of gross domestic product spent on higher education will rise from 4.5 per cent to 5.6 per cent. Spending on higher education will rise from £7.6 billion this year to £9.9 billion in 2005.

However, the apparent generosity - a £2.3 billion windfall - falls short of the £9.9 billion that Universities UK says is needed.

Sir Howard Newby, chief executive of the Higher Education Funding Council for England, said that he welcomed the publication of the white paper and that it would have a far-reaching impact on the future of higher education in this country. Sir Howard described the agenda it sets as "challenging" and said the funding council looked forward to working with universities to achieve these goals.

Mr Clarke outlined how the money would be spent in his annual letter to the Higher Education Funding Council for England this week.

The document makes clear that the growth in traditional, three-year full-time university courses has halted. The additional funded places will be offered for foundation degrees from 2004 in preference to traditional honours degree courses. The numbers studying traditional three-year courses will remain constant.

There is enough cash for an extra 14,000 full-time equivalent students next year. An additional 19,000 places are budgeted for 2004-05, rising to 23,000 in 2005-06.

However, the government has asked the English funding council to review whether or not foundation degree courses should attract the same level of funding as honours degree courses. The decision is expected to inform the funding allocations for 2004-05 and the years afterwards. The implication is that expansion could be done on the cheap.

Spending on research is up markedly. There is an extra £80 million for next year, rising to £107 million in 2004-05 and £246 million in 2005-06. This final figure is almost the sum needed to fund the results of the 2001 research assessment exercise, but the extra cash will be concentrated on the large world-class departments rather than being used to reward those lower down the ladder.

There is a new scheme to reward excellent practice in teaching departments by making them centres of excellence, with a "commended status" for departments that are part way to becoming centres of excellence.

Each centre of excellence will receive £500,000 a year and will be eligible to bid for up to £2 million each of capital funding to improve its teaching infrastructure and estates.

The government has earmarked £14 million for this next year - indicating that it expects 28 such centres to be established - rising to £35 million in 2005-06, which would be sufficient for 70 centres of excellence.

The day before the white paper was published, Hefce announced that it had suspended its restructuring and collaboration fund. From the autumn, it will be replaced with a strategic development fund to support structural change.

In his letter to the funding council, Mr Clarke said he expected the fund to be used to support "strategic alliances, merger and collaboration between higher education and further education, and to provide incentives for institutions to develop innovative and flexible programmes of study, including piloting 'compressed' honours degrees lasting two instead of three years."

Universities and colleges will receive £2.5 million next year to develop foundation degrees with employers, rising to £3 million in 2004-05 and 2005-06. Courses will be targeted at the associate professional skills gap in areas such as teaching and healthcare.

A national network of universities that will validate foundation degrees delivered in further education colleges will be established. Some £2.5 million has been earmarked for this next year and the year after, rising to £3 million in 2005-06.

Funding for links with business and the community will continue, with the funding council providing £20 million a year for the Higher Education Innovation Fund.

There should also be a new round of the HEIF worth £171 million in 2004-05 and 2005-06. This will be broadened to include less research-intensive institutions, and will help them develop knowledge transfer and skills development.

The £170 million for staff development will be consolidated into universities' core grants from 2004-05. Mr Clarke added a further £50 million to this fund in 2004-05 and £117 million in 2005-06. Universities and colleges will have to submit and implement human resource strategies to access the cash.

Other points note that:

  • Hefce will manage the development of a new students portal to deliver information electronically to students. This should be up and running by this autumn.
  • Hefce will devise a strategy for institutions to concentrate their resources more effectively on student support. Service is expected to improve but for no additional cash
  • The cost of running the funding council is not to increase greatly. It has been asked to improve its efficiency and economy of administration and seek increased value for money. It will receive a £15.3 million to cover running costs next year, up 0.2 per cent in real terms.


PUBLIC FUNDING FOR HIGHER EDUCATION

  



PER CAPITA SUPPORT

  
  SPENDING REVIEW STATEMENT FOR HIGHER EDUCATION

  £ million England, 2002/3 to 2005/6

2002/03 2003/04 2004/05 2005/06 % increase in cash terms

Research*

of which capital

1,910

256

2,144

364

2,318

453

2,633

453

38

77

Knowledge transfer

62

82

101

114

84

Teaching and learning

of which capital

3,943

155

4,230

207

4,604

377

4,963

442

26


185

Expansion

0

9

21

32

Access and widening participation

86

119

130

132

53

Management leadership and strategic development

15

23

32

34

1

Student support**

1,578

1,691

1,839

1,996

26

Other

2

11

12

14

Total recurrent

7,185

7,738

8,2

9,023

Total capital

411

571

830

895

Total

7,596

8,309

9,057

9,918

31

* Including estimates of the amount of the Office of Science and Technology's UK-wide funding that is likely to go to HE institutions in England. These estimates are forward projections based on spending in previous years by OST and the OST research councils.
** Estimated share of student support likely to go on HE students domiciled in England. These estimates are based on the most recent data from the Student Loans Company.

Source : DFES The Future of Higher Education

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