Three days before Christmas is a pretty good time to have a bad news day on funding. With most people either at office parties or out doing some final gift shopping, few will hear the sound of belts being firmly tightened.
Such was the case with higher education funding under Lord Mandelson’s Department for Business, Innovation and Skills. On 22 December, Mandelson published the 2010/11 grant letter to the Higher Education Funding Council for England. This revealed a cut of more than £500m, or 6.6%, for HEFCE next year. A hefty part of this reduction was down to capital spending being brought forward to 2009/10 to boost the economy.
But there were also considerable reductions relating to the savings announced in last year’s Budget and Pre-Budget Report. HEFCE funding was also affected by BIS having to shift resources away from teaching and capital spending to meet extra student support costs caused by the economic downturn. The upshot is a small but highly significant reduction in the amount of teaching funding per student next year.
Under the 2007 Comprehensive Spending Review, the unit of funding per student for 2010/11 was set at £4,140 in 2007/08 prices. The final paragraph of Mandelson’s letter to HEFCE says that this will now fall to £3,950. A drop of only £190, you might rightly point out. But this is the first time in a decade that the unit of funding has been cut in real terms. The cut comes after BIS warned in November in its document Higher ambitions that maintaining per capita funding ‘through public expenditure alone will be extremely difficult’.
The department wants universities to develop ‘a diverse set of funding streams’, not least from employers and ‘individuals’. In terms of employers, Mandelson wants higher education to expand the programmes that ‘deliver the higher level skills needed’. In terms of individuals, BIS presumably means students. Lord Mandelson has already signalled his openness to ‘greater costs to the student’. By cutting public spending on teaching per student, the government is saying to the current review of top-up tuition fees that it is neither willing nor able to fully fund higher education to the highest standard. Quite a message to digest over the Christmas pudding.
