Further teaching grant cuts ‘would undermine tuition fee rise’

Universities have warned the government against further reducing funding for teaching, after a £100 million budget cut last year. 

The government is understood to be currently determining the level of next year’s Strategic Priorities Grant (SPG) – the money given to universities to support teaching, including for high-cost subjects.

But Universities UK (UUK) has warned that the amount of money the government contributes towards the cost of obtaining a degree has fallen proportionately, placing a greater burden on students. 

When tuition fees were increased in 2012, the government at the time envisaged covering 54 per cent of the cost of teaching English undergraduates. 

However, new analysis by London Economics on behalf of UUK has found that, for students starting university in 2025-26, the government will be contributing 23 per cent – less than half the proportion originally planned.

Anticipated per student funding from the government for teaching has declined in real terms by two-thirds from £7,720 in 2012-13 to £2,480 in 2025-26, the analysis found. 

Last year, the government cut the SPG budget by £100 million and education minister Bridget Phillipson announced a review of the fund to ensure it is supporting the government’s “long-term ambitions of growth and opportunity”. 

She said the SPG would be reformed for the 2026-27 academic year so it “can be more effectively targeted towards priority provision which supports future skills needs and the industrial strategy”.

The cuts were widely criticised by higher education providers, some of whom lost millions of pounds in expected funding. 

Vivienne Stern, chief executive of UUK, said any further cuts “risk undermining” the positive impact of inflation-linked tuition fee uplifts. 

“Getting a degree benefits individuals because they go on to earn more, so it is right that they contribute, but it also benefits society and the government which get greater tax revenues and a stronger economy from a more highly skilled workforce,” she said. 

“Universities are now teaching with far less funding per student than a decade ago, while expectations on quality, access and outcomes keep rising. If we want to retain world-class universities that deliver for students, employers and the economy, government needs to maintain public investment.”

Stern added that it is “not fair” to students and future graduates to “keep raiding funding for higher education to meet growing costs elsewhere in the education system”.

Gavan Conlon, partner at London Economics, said that the higher education sector “contributes substantially to economic growth, so there is an ever-present economic rationale for the government to make a significant contribution to the funding of the sector”. 

helen.packer@timeshighereducation.com