So, the long awaited Government Spending Review was published last week. This review is only for the period 2015-16, up to the next General Election. A further Spending review is anticipated in 2015 with a new Government. For those who have not had the time or the energy to sift through the details, here are the headlines that will impact directly on universities:
- Much of our funding derives from the Department for Business Innovation and skills (BIS).The BIS DEL budget (DEL meaning the ‘Departmental Expenditure Limit’) will be cut by 5.9% in 2015/16. This is a substantially smaller cut than feared, given that BIS is one of the big, non-protected departments (in contrast to the health and schools budgets for example which are protected).
- HEFCE will be asked to make savings of ‘at least’ £45 million within the teaching budget – details are still to be determined, but this almost certainly means that the teaching element of the ‘block grant’ allocated to universities will shrink. We will thus be even more dependent on student fees and our ability to attract the best students.
- The science budget to be maintained in cash terms at £4.6 billion. This is largely good news since it means that the Research Councils budgets will be preserved – although taking inflation into account this will be a cut in real terms.
- Capital budget will increase from £0.6 billion in 2012-13 to £1.1 billion in 2015/16 and will increase in real terms in every year to 2020-21. Again this is good news since you will recall that there was a dramatic cut in capital spending when the economic crisis took hold. We don’t know yet how this funding will be apportioned.
- Within this the government will extend the Research Partnership Investment Fund (RPIF) to 2016-17, making available £160 million per year of match funding to leverage private funding for scientific infrastructure. RPIF is a fund designed to support investment in higher education research facilities. It is adminstered by HEFCE – further details are here
- Student maintenance grants will be maintained in cash terms in 2015-16, saving £60m.
- The Government will refocus the National Scholarship Programme to support postgraduate students from disadvantaged backgrounds. The £50 million fund will be administered by HEFCE, and allocated on a competitive and matched-funded basis. The news here is mixed – on the one hand support for postgraduate students is very welcome, since this cohort seems largely to have been forgotten during the fees upheaval. On the other hand these funds have come from the £150M National Scholarship Programme (NSP – i.e. support for undergraduates) which will be phased out. I believe the thinking here is that applications from undergraduate students from disadvantaged backgrounds have not fallen despite the hike in fees (remembering that a university education is still ‘free’ at source).
- The government is not going to shift medical research or education out of BIS ‘because they are working well where they are’. Although we don’t receive large amounts of MRC money in SAgE, this is a welcome relief since the MRC budget remains a large slice of the BIS budget, rather than a small slice of a very much larger budget, where there is a risk it could be swallowed.
- Technology Strategy Board to receive and additional £185m to support innovation, including Catapult Centres and the Biomedical Catalyst. This will involve the establishment of new Innovation Platforms to tackle societal challenges, in the following areas:
i. Energy Systems
ii. Future Cities
iii. Health and Care
iv. Transport Systems
v. Expansion of Sustainable Agri-Food Innovation Platform
Many of these are familiar to us which is again very good news.
- £50m savings from BIS admin budgets.
- Single Local Growth fund will be £2 billion a year. LEPs can bid for this funding. At £10 billion over the next five years, this is substantially less than the £50 billion proposed by Lord Heseltine in his review. This is very important for us – LEPs (Local Enterprise Partnerships) will have money, so we need to be ready to bid for these funds when the details emerge.
- £260m will be cut from the BIS budget for FE.
The overall message from the Government is to ensure the UK remains a world leader in science and research. Overall the outcome is much better than we had feared, and nothing in the review will derail our current strategy.