English university budgets slashed, heads 'rebuked' over pay

Universities and other higher education institutions in England face further heavy cuts in direct support from the UK government – with the cuts continuing after the next general election, due in May 2015.

And the government says it is concerned at the upward drift of salaries for vice-chancellors and other top posts and has urged 'restraint'. The academics’ trade union described the government's intervention as a “rebuke” for vice-chancellors.

The body that allocates funding to individual universities, the Higher Education Funding Council for England, or HEFCE, was told on 10 February that it would have less to distribute not only in 2014-15 but also in 2015-16.

The grant

A grant letter from Dr Vince Cable, secretary of state for business, innovation and skills, and David Willetts, minister for universities and science, makes clear that the settlement will mean reductions in HEFCE funding over the two years “beyond those accounted for by the switch to publicly funded tuition fees” that began in 2012-13.

Total HEFCE funding for 2014-15 is £4.091 billion (US$6.762 billion), £125 million less than the 'indicative' funding of £4.216 billion set out in last year’s grant letter.

And it says it expects HEFCE to deliver the cuts “in ways which protect as far as possible high-cost subjects (including STEM [science, technology engineering and mathematics]), widening participation (which is funded via the HEFCE Student Opportunity allocation), and small and specialist institutions”.

It asks the funding council to continue working with the research councils and others to support internationally excellent research.

Income from tuition fees increased the total available for spending on teaching in English universities from around £7.9 billion in 2011-12 to almost £8.5 billion in 2013-14.

A ring-fenced settlement for science and research means that recurrent funding is maintained at £1,573 million, the same cash levels as 2013-14, so that with inflation running at closer to 2% the real terms cut will be less severe than when inflation peaked in 2011.

Overall, the amount of capital funding for teaching and research will increase in 2014-15 to £440 million.

The grant letter confirms the government’s provision of a maximum of 30,000 additional student places in academic year 2014-15 for HEFCE-funded institutions.

The student number control will be removed entirely from 2015-16, and the government has asked HEFCE to ensure that higher education institutions maintain the quality of the student experience in these circumstances.

But a dedicated £37 million fund that gave discretionary grants to the poorest students is scrapped and no figure is given for a separate fund, allocated to universities on the basis of how many of the poorest students they recruit.

Top salaries rebuked

The warning to the sector on top salaries is buried in one of the appendices to the letter.

It says: “There is an onus on institutions to demonstrate that they offer value for the fees students pay. At the same time, there remains a cross-government imperative to ensure that public money is spent efficiently.

“We are concerned about the substantial upward drift of salaries of some top management. We want to see leaders in the sector exercise much greater restraint here as part of continuing to hold down increases in pay generally.”

A Times Higher Education survey of salaries for 19 of the 24 vice-chancellors in the elite Russell Group disclosed that the average rose by just over £22,000 to nearly £293,000 in 2012-13.

The HEFCE board will consider the grant letter at an extraordinary board meeting on 25 February. The council plans to publish institutional funding allocations on 27 March 2014.

Tim Melville-Ross, chair of the HEFCE board, said: “At a time of considerable pressure on public finances, the funding settlement for 2014-15 and the indicative allocation for 2015-16 incorporate significant reductions.

“Nevertheless, the government continues to recognise the key contribution that higher education makes to the economy and society. We will work to implement the settlement in as fair and sensible a way as possible.”


The University and College Union, or UCU, said the government Department of Business, Information and Skills had to make up a “huge shortfall” in funding because of an overspend on student loans, “largely caused by unchecked recruitment by private providers”.

UCU General Secretary Sally Hunt, said: “Ministers are right to rebuke greedy vice-chancellors for their unjustified big pay rises, not least when according to the government's own figures average academic pay has flatlined since 2010.

“Unlike those at the top, all staff want is fair pay and we hope ministers will recognise this distinction.”

Dr Wendy Piatt, director general of the Russell Group of universities, said it hoped “the government will deliver on its reassurances that the expansion of the sector would be fully funded. Good teaching requires proper levels of investment.”

Libby Hackett, chief executive of the University Alliance, another of several ‘mission groups’ in British higher education, said: “We applaud the government's commitment to protect direct funding for high-cost students, not just high-cost subjects.

“It shows a government that understands the hard work that goes into achieving real social mobility for the many, not just the few, and is willing to step up and put its money where its mouth is.

“As well as supporting the success and employability of students from poorer backgrounds, this fund is economically efficient with the Treasury receiving, on average, a £90,000 net return on every undergraduate degree.

“Alongside the 30,000 additional places announced in the autumn statement, this is a strong message about creating a fairer and more prosperous future.”

Well at least they are finally concerned about the insane pay packets of the top management. It is even worse though here in Australia, with some VC's earning up to $1 million.

Christopher Weir on the University World News Facebook page