Archive for March 26, 2010

Cut and Thrust and Nip and Tuck

Posted in Finance, Science Politics with tags , , , , , , , on March 26, 2010 by telescoper

This week we received the not-altogether-unexpected news that the budgets of Welsh universities will be cut next year. The Higher Education Funding Council for Wales (HEFCW) has announced its detailed allocations for 2010-11 and all but one institution will receive a cash cut.  Cardiff University faces a cash cut of 1.74%. Lampeter is the exception, but it gets a cash increase of only 0.32%. After taking inflation into account, even they get a real terms decrease. So it’s real cuts across the board for Welsh Higher Education, with a total of about £30 million in funding taken away.

In fact, it appears that the total amount of money available to HEFCW for next year is level in cash terms compared to last year. The total amount it has distributed in recurrent grants has, however, decreased by about 2% on last year. As far as I understand it, the discrepancy between the income and expenditure is partly explained by the diversion of some funds into a new Strategic Implementation Fund(SIF) to enable HEFCW to meet the goals outlined in the Welsh Assembly Government (WAG) document stating its vision for Higher Education, entitled For our Future. Some elements of SIF are included with the current allocation, but other’s are not, hence the  cash cuts seen here.In future, a larger proportion of the budget will move from recurrent, formula-based funding towards initiatives more closely aligned with the WAGs or, more likely, wasted on window-dressing and increased bureaucracy.

We’ll have to see what the impact of the new SIF arrangements will be in the longer term. In the short-term, however, the cuts (though obviously regrettable) are by no means a shock and will probably appear entirely insignificant after the General Election and the real cuts start, probably more like 20% than 2%…

The situation in Wales contrasts with Scotland where the Higher Education has grown by 1% for 2010/11.  Some Scottish universities, such as Edinburgh with a cash increase of 2.2%, have done pretty well. A small number of others, such as Stirling have been cut by 3.3% in cash terms.

Allocations for English universities were announced by HEFCE last week. There the situation is more mixed, partly to do with HEFCE rejigging its formula for research funding to concentrate it even more than last time (something that HEFCW – wisely, in my view – decided not to do..). It seems about half the 130 institutions in HEFCE’s remit get a cash increase, although when inflation is factored in the number with a real increase is much smaller. Among the universities with big cash cuts are Reading (-7.7%) and the London School of Economics (-6.3%).

As far as I understand the situation, these figures don’t include the fines for over-recruitment recently demanded by Lord Mandelson and may not take into account cuts in capital allowances, so things may be a lot worse than they appear at first sight.

However, to complicate things  a bit more, this week’s budget announced new funding for Science Technology Engineering and Mathematics (STEM) subjects, corresponding to an increase in numbers of about 20,000.This is only for England, as Higher Education in Wales and Scotland is not part of the remit of the Westminster government. One advantage of this for those of us in Wales is that we can’t be affected by pre-election tinkering in the same way England can.

I’m sure the news of new funding is very welcome to my colleagues across the border, but it does look to me like a bit of sticking plaster that looks likely to fall off after polling day.

Anyway, it looks to me like these results are going exactly with the form book. Scotland has always valued Higher Education more strongly than England, and Wales has usually trailed along in third place.  The real struggle hasn’t yet started, however, and we have to wait anxiously to see how hard the axe will fall once the election is over.

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