UK: A budget setback for the sector

Last week's budget delivered by Alistair Darling, Chancellor of the Exchequer, was a profound disappointment for British higher education. The Department for Innovation, Universities and Skills faces cuts of £400 million (US$583 million) with no change to plans to restrict student places just when applications have risen by 8.8%. Earlier the government announced cuts of 5,000 in the number of funded student places in England for 2009-10.

Rick Trainor, President of the vice-chancellors' group Universities UK, said the additional £400 million cuts identified by Treasury as "efficiency savings" for the department would be "very challenging for the sector".

"We note the commitment to fund extra sixth form and further education places, as well as the further support for 18-24 year olds seeking to retrain or enter the workforce," Trainor said. "However, we are disappointed there has been no rethink on the current restriction on student places in higher education."

GuildHE, representing smaller specialist colleges, and million+, the think-tank with membership from former polytechnics, were particularly concerned about the cuts as their institutions have achieved considerable success in tackling the government's agenda of widening participation.

Professor Les Ebdon, Vice-Chancellor of the University of Bedfordshire and chair of million+, said: "The government's long term strategy of promoting aspirations is about to come unravelled because the Chancellor has not provided funding for the thousands of additional students who are applying to university to improve their life chances post-recession. This contrasts sharply with the US where President Obama's fiscal stimulus package includes higher education."

Professor David Baker, GuildHE Chair and Principal of University College Plymouth St Mark and St John, said: " After the decision to freeze funding for additional student numbers, further cut-backs are likely to mean it will be impossible to meet government targets to attract a higher proportion of people from lower income backgrounds and other under-represented groups into higher education."

Baker said this was particularly frustrating for GuildHE institutions which had experienced increases of up to 33% in applications for places so far this year.

Sally Hunt, General Secretary of the University and College Union, said acess to education was vital in helping individuals and the country cope with the current economic climate. Hunt said the Chancellor should have offered more for higher education.

"We believe the budget was an excellent opportunity for the government to reverse its decision on funding cuts for people wishing to re-skill at degree level as now, more than ever, people need support for a second chance."

The funding cut made last year for equivalent or lower level qualifications, the so-called ELQs, has been described as this government's least popular education policy following widespread criticism from unions, universities and the other political parties.

After six years of relative affluence, British higher education was preparing to face a precarious future. The lecturers' union had just launched a campaign to "defend jobs, defend education" and the vice-chancellors' organisation had written to the Chancellor prior to the budget highlighting the major contribution universities made to the UK economy.

Hunt, at the launch of the campaign said: "'I believe that making teachers, lecturers and those who support learning redundant is an obscenity at any time but during a recession it is nothing more than an act of academic vandalism. The recession has reinforced the importance of learning, not reduced it; yet hundreds of UCU members' jobs are now at risk."

The union claims that eight departments are under threat at Liverpool University and 500 jobs are likely to go at London Metropolitan University.

In her letter to the Chancellor, Diana Warwick, Chief Executive of UUK, said higher education generated £45 billion in direct and secondary effects: "They (the universities) are major employers, many the largest in their localities, and between them employing 1.2% of the UK's total workforce," Warwick wrote.

"As you know, the value they create goes beyond what can be directly measured, carried in the heads of our graduates, and produced by our many and varied interactions with industry." She also warned the UK risked losing out to competitors if its universities were not adequately supported at this crucial time.

"The United States has set the pace with a multi-billion dollar investment in higher education as part of a broader fiscal stimulus package. Not only is this the right action in itself, but it presents an irresistible challenge to the UK. As our major competitor, we now face the very real danger of losing our research stars to our better-funded counterparts in the United States, causing lasting damage to the UK."

In a recent meeting of the joint negotiating committee for higher education staff, the Universities and Colleges Employers Association said: "The precarious future of public finances now means that higher education can no longer rely on the continuation of recent improvements in public funding and other income."

The association said staff costs had been running ahead of inflation and the increase in public funding over the last six years. A pay increase of 5% under the fifth stage of the 2006-09 agreement exceeded virtually all other settlements in the economy as a whole and was ahead of other major public sector groups and it warned and the current funding situation was "extremely tight".

It was not yet clear what job losses might look like in higher education but nearly 100 institutions had reported staffing reductions and/or freezing vacant posts, the association said.

On the brighter side, higher education institutions faced few problems in attracting staff and turnover levels were very low compared with other sectors.

Chief Executive Jocelyn Prudence commented: "Stability and sustainability of institutions in the sector remains of paramount importance during this time of severe economic uncertainty.

diane.spencer@uw-news.com