Hefce reveals £150m cut

Funding council details how cash will be saved from English universities’ 2014-15 and 2015-16 budgets after George Osborne demanded extra cuts

July 22, 2015

Teaching grant for universities in England will be cut by £150 million for 2014-15 and 2015-16.

The Higher Education Funding Council for England today outlined how the cuts would be made, after George Osborne said last month that the Department for Business, Innovation and Skills would need to save £450 million from its 2015-16 budget.

Hefce reveals that the biggest single sources of savings will be from money “previously set aside to support an expected increase in student numbers in 2015-16” but now scrapped (£37 million); from the ending of the “transitional” funding for postgraduate and STEM subjects in the wake of the research excellence framework (£52 million); and from a 2.4 per cent deduction from all teaching grant for 2014-15 (£38 million).

The funding council has found several sources for savings and, to some extent, has therefore avoided large-scale cuts to single pots of money – such as student opportunity funding for the disadvantaged or support for high-cost subjects – that had been feared by some in the sector.

The funding council details the cuts in a letter to vice-chancellors from its chief executive, Madeleine Atkins, published today.

Professor Atkins says that on 21 July, the business secretary, Sajid Javid, “wrote to notify us of a consequential saving of £150 million to be made solely from the grant provided for teaching; the funding that the government ring-fences for research has been maintained”.

She says that the aim of Hefce’s approach to the cuts is “to ensure that the short-term viability of institutions is not put at risk”.

Scrapping the allocation of teaching grant for extra student numbers following the government’s abolition of student number controls in 2015-16 means that there will no student opportunity or high-cost subject funding for those students.

Other sources of cuts cited by Ms Atkins are £13 million “from 2015-16 funding for national facilities and initiatives, primarily through a reduction of £10 million to the Catalyst Fund budget”.

And £10 million will be found “through the implementation of grant reductions for 2015-16 for institutions that over-recruited against their student number control in 2014-15, or did not offset in 2014-15 such over-recruitment in 2013-14”.

The “transitional research allocations” of £52 million originally announced by Hefce for 2015-16 were to support postgraduate research degree provision and to compensate for the effects of the REF on STEM subjects.

Ms Atkins says: “Given that recurrent research funding has been maintained, we can no longer justify providing this supplementary funding at the expense of more significant reductions to core teaching grants and therefore we will not be making any payments in relation to transitional research funding from teaching sources.”

But she adds that “taking note” of Mr Javid’s “request to protect transitional STEM support we are working with BIS to see whether the £28 million previously allocated for this purpose can be found from other sources”.


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