Gordon Brown's promise of an additional Pounds 100 million for higher education could give universities their first real-terms increase in cash per student for more than a decade.
The chancellor's spending review, announced on Tuesday, earmarked half of the Pounds 100 million for improving pay for academic high-fliers, who are being lured abroad by higher salaries.
Lecturing unions said that the Pounds 50 million, if spread evenly, could fund a 5 per cent increase for all academic and related staff.
Another Pounds 20 million will go to widening access, but the details of how this and the money for pay will be distributed is the subject of funding council negotiations.
The remaining Pounds 30 million is likely to go to the e-university and to supporting the proposed two-year vocational foundation degree.
Although it is too early to establish precise figures, the Pounds 100 million bonus could produce a real-terms, per-student rise of up to 1 per cent for 2001-02. But much will depend on the number of students the sector is expected to recruit. Spending settlements for 2002-03 and 2003-04 are still to be announced.
The extra cash gives higher education Pounds 395 million more in 2001-02 than it will get in 2000-01. That is a 4.6 per cent real-terms rise, taking total funding to more than Pounds 5.8 billion. The first spending review, announced in 1998, accounts for Pounds 295 million of the additional cash.
The size of Tuesday's settlement confounded the higher education sector, which had expected, at best, a continuation of this year's 1 per cent cut. Eleventh hour lobbying by university employers and trade unions may have swung the case for a rise.
Tony Bruce, policy director for the Committee of Vice-Chancellors and Principals, said: "It is certainly enough money to get rid of the 1 per cent cut. But we need this to be confirmed and for it to apply throughout the spending review period up to 2004. We are disappointed about the settlement for the Bett recommendations on pay."
The CVCP and lecturing unions have lobbied for nearly Pounds 500 million extra to meet the recommendations on pay in the Bett report. The bulk of the cash is required to bring academic pay in line with salaries in comparable professions and to give female academics equal pay. The spending review addressed neither issue.
Tom Wilson, head of universities for lecturers' union Natfhe, said: "The Pounds 50 million is basically a sop to highly publicised fears about a brain drain. The money should be spread across all academics and related staff. We also have no indication of the settlements for the following two years. Why should we believe there will be jam tomorrow?" David Triesman, general secretary of the Association of University Teachers, said: "I have a sense that a corner may have been turned, but the sums needed in the longer term are much greater. The additional Pounds 50 million should be spent on all academic salaries. The academic stars of tomorrow are not stars yet. Something has to be done about baseline pay."
Opposition politicians were more sceptical. Shadow education secretary Theresa May said: "It is just giving back part of the tuition fee money siphoned off by government. I think universities should be cautious about the unit of resource because we do not know how many more students they will be expected to recruit. It is also telling that while every other sector knows its spending for the next three years, universities are told only one year."
Evan Harris, higher education and science spokesman for the Liberal Democrats, said: "If the government thinks this is the answer to higher education's problems, then it has no conception of the problem. Pounds 50 million is not the answer to recruitment, retention and equal opportunities. It is a slap in the face for female staff."
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