Financial forecasts unsettled by peer's review

October 7, 2010

Universities have been asked to "form their own view" on the financial implications of Lord Browne of Madingley's review of student fees and funding before Parliament approves any changes, it has emerged.

As usual, the Higher Education Funding Council for England has asked institutions to submit their financial forecasts for the coming year by 1 December. But this year, the forecasts will have to factor in the impact of Lord Browne's report and the government's Comprehensive Spending Review, which will be published on 20 October.

Official guidance sent by Hefce to universities last month states: "Higher education institutions must take account of the outcome of the 2010 spending review that will be announced in October. They should also form their own view on the implications of the Browne review and specify the assumptions regarding this in their financial commentary."

It gives finance directors just six weeks to revise their plans following the CSR, which is likely to contain only headline figures for cuts to the higher education budget.

There is further unease about Lord Browne's review, due to be published next week. Any recommendations it makes for a rise in fees to compensate for cuts to the teaching budget would still need to be ratified by a Parliamentary vote.

One finance director, who wished to remain anonymous, said many universities may struggle to revise their forecasts in time, especially those hit by recent staff cuts in the relevant administrative departments.

Although Hefce's guidance makes clear that it may seek additional updated forecasts after December in light of further developments, university finance directors were sufficiently worried to ask for a recent meeting with the funding body to highlight concerns.

A Hefce spokesman said it would "expect universities to provide us with their latest assessment of their financial forecasts in December based on the information available to them. We will discuss with them whether these need to be updated in 2011 when further details are available in the annual Hefce grant letter from the secretary of state."

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