Cuts of ?600 million to government funding for universities and research have been condemned by the sector as a potential blow to the UK’s recovery from recession.
Alistair Darling, the Chancellor of the Exchequer, revealed in his pre-Budget report on 9 December that there will be a ?600 million reduction in the higher education and science and research budgets in the two years 2011-13.
The report says the savings will come from “a combination of changes to student support within existing arrangements; efficiency savings and prioritisation across universities, science and research; some switching of modes of study in higher education; and reductions in budgets that do not support student participation”.
Leading figures in the sector warned that the cuts could have a severe impact, and said that the independent review of fees and higher education funding, led by Lord Browne of Madingley, must take account of the new landscape.
Wendy Piatt, director-general of the Russell Group of large research-intensive universities, said that “now more than ever” universities had a role to play in pulling the UK out of recession. She said: “With these potentially severe cuts in higher education and research, and escalating global competition, sustaining the success of our leading universities will be incredibly difficult.
“With the squeeze on public spending likely to continue into the next Parliament, it is even more urgent that universities are allowed access to higher levels of income from sources other than the public purse.”
Steve Smith, president of Universities UK, said the cuts will be “extremely challenging” for the sector.
“We are aware of serious stimulus investment in research and education from many competitor governments, and the UK cannot afford to be left behind,” he said.
“Cuts to these budgets will accelerate the urgency of the discussions taking place into the sustainability of the higher education sector through the review into higher education funding and student finance. It is therefore essential that we review student-support costs as part of the review.
“We note that the ?600 million reductions are to come from the ?13 billion spent on higher education (including student support), science and research budgets.
“We hope that this proposed reduction is fed into Lord Browne’s review of funding so that the appropriate proportion could be met by changes to the current student-support system.”
Alice Hynes, chief executive of the GuildHE mission group, said the Government “must be cautious what risks it takes with this dynamic sector if it makes higher education the target of sharp cuts”.
She added: “This places even more responsibility on Lord Browne’s review to factor in these additional expectations and bring into his coverage all potential funding sources.”
Both UUK and GuildHE welcomed the announcement of new financial support for undergraduates from low-income backgrounds to undertake short, unpaid internships.
The true scale of cuts to higher education funding is likely to be beyond that initially revealed in the pre-Budget report, according to the Institute for Fiscal Studies (IFS).
Its analysis of the Chancellor’s report picks out higher education as a “significant unprotected area” – alongside defence, transport and housing – that will face big cuts in the next Parliament to balance rising or frozen spending in ring-fenced areas.
That contradicts the claim by Alistair Darling, the Chancellor, that spending for Whitehall departments outside ring-fenced areas will remain flat.
According to IFS researcher Gemma Tetlow, unprotected departments face average cuts of 5.6 per cent a year, or a total ?36 billion in the three years to 2013-14.
“All the increase in central government spending on public services over Labour's second and third terms will be reversed by 2013-14. And potentially the first-term increases could be reversed by 2017-18,” she said.