Fund-raising universities may still face cuts from government

20 Mar 03
Education Secretary Charles Clarke has refused to give MPs an undertaking that universities successful in raising money themselves would be protected from a corresponding cut in central government funding. Clarke told the education select committee on

21 March 2003

Education Secretary Charles Clarke has refused to give MPs an undertaking that universities successful in raising money themselves would be protected from a corresponding cut in central government funding.

Clarke told the education select committee on March 19 that he could not guarantee that income generated by tuition fees or endowments would be left out of the equation when institutions' grants were calculated.

When pressed by committee members, during a hearing on the higher education funding white paper, Clarke insisted: '[I can] offer no guarantee that future governments would not cut government funding for universities to offset the increased funding they would receive from £3,000 top-up fees.'

Speaking after the hearing, Liberal Democrat committee member Paul Holmes told Public Finance that, by refusing to give such a commitment, the government was generating deep distrust of its proposed reforms among the academic community.

'All the university vice-chancellors that we have spoken to believe that the extra money raised will be taken out of their government grants,' he said.

Holmes warned that the proposed reforms would be a disincentive to potential university students and could restrict the number of youngsters from disadvantaged backgrounds going on to higher education.

He said: 'The student is plunged into debt but neither they nor the universities will benefit. Meanwhile, the proportion of students from lower socio-economic groups entering university has fallen from 13% to 7% since the introduction of fees.'

A spokeswoman for Universities UK, the representative body for higher education institutions, told PF its members would expect Clarke to give a clear undertaking he would not use the proceeds of universities' fundraising efforts to reduce the amount of central government funding they received.

'Certainly Universities UK will be seeking an assurance from Charles Clarke that it is not his intention to do that.

'We are well aware that this has been happening to universities' grants since tuition fees were introduced in 1997,' she said.

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