Universities UK has warned the government that ¡°misplaced or mistimed¡± funding cuts could ¡°put at risk the global reputation of our universities¡±, as spending review talks include a focus on the question of whether the seven research councils could be merged.

The deadline to make representations on the spending review, which will set the spending framework for departments up to 2019-20, passed on 4 September. The government has asked for scenario modelling of 25 per cent and 40 per cent cuts from non-protected departments such as the Department for Business, Innovation and Skills, which is responsible for higher education and science and has a resource budget of ?13.1 billion in 2015-16.

There are suggestions from some that Sajid Javid, the business secretary, may seek to reach an early settlement with the Treasury this month, well before the spending review is published on 25 November. However, one sector source said that it was an open question whether this would be a means to secure a more generous settlement for BIS, or a way for Mr Javid to find further favour with his mentor George Osborne, the chancellor who is a leading candidate to be the next prime minister.

In a signal over which elements of the English higher education budget may be most vulnerable to cuts, UUK says in its spending review submission that funding for teaching high-cost subjects ¡°should not drop below current levels in real terms¡± and student opportunity funding for the poorest students ¡°should be maintained to cement the progress made in recent years¡±.

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UUK also offers a warning in its conclusion, telling the government that it should be ¡°in no doubt that misplaced or mistimed cuts in public funding will put at risk the excellence and global reputation of our universities. This, in turn, will limit the vital contribution universities can make to improving productivity, boosting economic growth and meeting the skills needs of our economy.¡±

¡®It seems everything is on the table¡¯

Mr Javid has asked management consultants McKinsey to carry out a review of all BIS-funded bodies as part of the department¡¯s spending review process ¨C although the department has never officially confirmed the existence of the review.

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McKinsey is said to have described the department¡¯s aim as being a ¡°sharper, smaller, cheaper¡± BIS.

In its dealings with the research councils, McKinsey is thought to have posed the question of whether seven research councils are needed, rather than just one.

Bringing the research councils, currently arm¡¯s-length bodies, directly within BIS is also seen as being one possibility under discussion within government. Changes to the dual support system, which splits funding between the research councils and quality-related support allocated by the higher education funding councils, are also thought to have been discussed as a possibility.

Naomi Weir, acting director of the Campaign for Science and Engineering, highlighted the scale of cuts required of BIS by the government. ¡°At the moment, it seems [that] everything is on the table, whether that is changing the shape of how research is funded to whole aspects of the BIS programme ¨C none of it is currently protected,¡± she said.

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Ms Weir said of the current ring-fence around the research budget: ¡°We cannot afford to be complacent that that will continue indefinitely.¡±

CaSE¡¯s spending review submission makes the case for science investment in terms of ¡°high-value job creation¡±. It argues that funding decisions must continue to ¡°uphold the Haldane principle¡±, and that the dual support system is ¡°efficient and effective¡­and should be maintained¡±.

Dame Julia Goodfellow, UUK president, vice-chancellor of the University of Kent and a former Biotechnology and Biological Sciences Research Council chief executive, said that while seven was not necessarily a ¡°magic number¡± for the number of research councils, ¡°they are efficient¡± at present.

¡°Look at the quality of research coming out,¡± she added of the high standard of UK research. The spending review submission from Million+, the body representing many post-92 universities, calls for a new translational research fund worth ?400 million to be established by the government, to ensure that research discoveries are turned into economic benefits.

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On ¡°opportunities for efficiencies¡±, Million+ says that there ¡°may be merit in considering a greater alignment of the research council structure with that used to assess research outputs and impacts through the REF [research excellence framework]¡±, which could mean reducing the number of research councils to ¡°around four¡±.

Pam Tatlow, the chief executive of Million+, said that this would be a route to ¡°more sensible savings¡±, rather than ¡°further targeting¡± student opportunity funding.

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john.morgan@tesglobal.com