Ministers may soon start outlining cuts of up to £1.4 billion from higher education spending, potentially including the research budget, after Russell Group vice-chancellors failed to win a guarantee from David Willetts that science would continue to be protected.
The Department for Business, Innovation and Skills is expected to send the annual grant letter to the Higher Education Funding Council for England later this month, setting out funding for 2014-15.
BIS is struggling to recover from a £1.4 billion overspend, which mainly went on maintenance grants, stemming from the higher than expected number of poor students going to university, and also a failure to control spending on students at private providers.
One option discussed in the department late last year was to cut 2 per cent from the £4.6 billion research budget in 2014-15 – ring-fenced until now – and again in 2015-16, which would save about £215 million over the two years.
This option was detailed on 13 November in a written briefing for Mr Willetts, the universities and science minister, and Vince Cable, the business secretary, and press reports based on this leaked document have been entirely accurate, according to some in the sector.
After press reports on the budget shortfall, the government added to funding concerns for many in the sector by announcing, in Chancellor George Osborne’s Autumn Statement on 5 December, the abolition of student number controls.
Russell Group vice-chancellors, led by University College London provost Michael Arthur, tried to press Mr Willetts on research funding at a Universities UK meeting the day after the Autumn Statement.
According to one sector source, the meeting was “all about getting Willetts to make a commitment that the science budget was fixed – he didn’t”.
There is said to be a dispute within the coalition government as to how to make cuts, with Mr Willetts and Mr Osborne seeking to maintain the science ring-fence. The alternative option backed by Mr Willetts is reportedly to convert £1,000 a year from the £3,250 student maintenance grant into loans, saving about £350 million.
However, Mr Cable and Nick Clegg, the Liberal Democrat leader, are said to oppose that – a stance that would spell cuts to research.
Further cuts to widening participation funding are also a strong possibility. Some suggest that last year’s spending round commitment to save “at least £45 million” from Hefce teaching funding in 2015-16 could be brought forward to 2014-15 – likely to mean cuts to student opportunity funding, which is allocated to institutions on the basis of how many of the poorest students they teach.