Spending cuts to higher education will hamper efforts to increase social mobility. So it might be time to ask employers to pay their fair share
Lord Mandelson appears blasé about slicing almost £1bn from university finances over the next three years. But his programme of savings for universities – announced just before Christmas – is likely to undermine the government’s policy of increasing social mobility through participation in higher education. This policy is emerging as a major theme in the run-up to the general election.
Last month, Mandelson told the Higher Education Funding Council for England that there would be a 6.6% cut in its grant for 2010/11. This means a reduction of more than £500m, and follows a £65m ‘saving’ in teaching funding for England in the current year. Further reductions announced in the 2009 Pre-Budget Report set out a period of stringency for higher education over the next three years, which has emphatically drawn a line under the real-terms-plus rises of the past decade.
The leaders of the Russell Group, which campaigns on behalf of the UK’s larger, research-intensive universities, fear 30 institutions might fold under this financial pressure. In response to strong criticism from the group, Mandelson says the £950m reduction in public funds ‘is only one part of a complex funding picture’. He questions whether it is reasonable to describe such cuts over a three-year period – amounting to a 5% reduction – as ‘swingeing’.
In fact, the English universities belonging to the Russell Group – including Oxford, Cambridge, University College London and Imperial College – are less likely to be hit hard by the cuts than some of the inner-city institutions, such as Wolverhampton and London South Bank, which specialise in teaching students from poorer backgrounds.
This is for two reasons. First, the research-intensive higher education institutions have more diverse streams of income than the teaching-focused universities. This means they are less dependent on recurrent public spending. Less than one-third of the income of Russell Group institutions comes from recurrent public spending, compared with around half of the income of the institutions that bear the brunt of the government’s ‘widening participation’ programme. So public funding squeezes disproportionately affect teaching-intensive institutions.
This sits awkwardly with Higher ambitions, the government’s higher education ‘blueprint’ published by Mandelson last November. It asserts that access to higher education ‘remains significantly correlated with parental income and wealth’. It adds that: ‘Too many people with the ability to benefit from higher education are not entering the system.’ Indeed, Mandelson’s Department for Business, Innovation and Skills says on its website that: ‘We must unlock the talents of all our people,’ which can be achieved by widening participation in higher education.
Second, Mandelson’s grant letter to Hefce makes a 1% cash cut in recurrent funding for teaching in 2010/11, but provides for a 7% increase in recurrent funding for research. Overall, the Hefce grant is being cut by 6.6%, but most of this is due to changes to capital grants. Some capital spending is being cut, however a lot has been brought forward to boost the economy. The generous funding for research will cushion the blow for universities that specialise in this area.
The outcry from the Russell Group will no doubt also have been made with a view to influencing the current review of variable top-up fees for higher education. Mandelson has already made things clear. In November, Higher ambitions said per capita funding remained important but ‘in the current circumstances, maintaining that through public expenditure alone will be extremely difficult’. The following month, Mandelson told Hefce that there would – for the first time in a decade – be a real-terms cut in teaching resources per student.
Mandelson has also signalled that he wants employers to contribute more, the taxpayer less and is relaxed about students paying higher fees.
In the higher education funding debate, employers are the dark horse. They increasingly need and benefit from the skills and knowledge graduates bring. To date, employers’ financial involvement in supporting higher education through government initiatives has been relatively slight. Perhaps it is time they made a bigger contribution.
Stephen Court is senior research officer at the University and College Union
