Spending review: fears for student opportunity funding and research budget

There are fears student opportunity funding for disadvantaged and disabled students could be severely cut or even scrapped, as the Department for Business, Innovation and Skills faces having to make savings in the region of at least £1.5 billion in the government’s spending review.

The £4.6 billion research budget is also thought likely to come under pressure in the announcement, to be delivered by George Osborne on 25 November.

Senior sector figures have privately voiced fears over the future of not just student opportunity funding – which includes support for institutions’ costs in recruiting and retaining disabled students as well as those from poorer backgrounds – but also Disabled Students’ Allowances, a separate funding stream.

The government closed a consultation in September on changes to DSAs, which totalled £127 million in 2012-13.

Departments that have already agreed early settlements with the Treasury in the spending review have agreed to make 30 per cent cuts over the next four years – a level that would spell a cut for BIS of about £3.9 billion on its £13.1 billion departmental expenditure limit for 2015-16.

In the summer Budget, Mr Osborne announced the scrapping of maintenance grants for the poorest students, which will be switched into loans, saving £2.5 billion a year when existing students with maintenance grants have eventually left the system.

Treasury talks and ‘tucking in’

BIS has been in talks with the Treasury as to whether this saving should be included as part of its spending review settlement, despite being announced in the Budget. If it is included within the spending review, as is thought likely by most observers, then that leaves BIS having to find a cut of £1.4 billion from a £6 billion portion of its budget (the £13.1 billion total minus the £2.5 billion maintenance grant cut and the £4.6 billion research budget, if that remains intact).

The BIS budget includes further education and business, as well as higher education and research.

The remaining teaching grant allocated by the Higher Education Funding Council for England totals £1.4 billion in 2015-16, with student opportunity funding worth £380 million seen as particularly vulnerable.

The Open University, which has a high number of disadvantaged and disabled students, had the biggest student opportunity allocation this year, at £34.4 million.

Peter Horrocks, the institution’s vice-chancellor, said that the funding supported the institution’s costs in recruiting disadvantaged students taking part-time courses.

“Some analysis the OU has provided to the Treasury shows that taking everything into account, part-time degrees cost 27 per cent less [to the taxpayer] than full-time degrees,” he added. “But if student opportunity allocation was to go, the OU’s response would have to be partly to put up fees. That would mean that part-time [study] would decline further.”

He continued that “the effect of reductions of student opportunity funding” would be to undermine “a more cost-effective form of higher education, which also supports widening participation”, an area he noted that Prime Minister David Cameron has made a priority.

On the science budget, Jo Johnson, the universities and science minister, is said to have described another flat-cash settlement – or a cut in real terms – as “likely the best outcome achievable” in the spending review.

The Russell Group says in its submission to the spending review that the research budget is worth £300 million a year less than in 2010-11 as a result of the flat-cash settlement since then, adding that another such settlement until 2019-20 would mean that the budget’s value “will have declined by over £600 million annually, or even more depending on inflation levels which may rise in coming years”.

Naomi Weir, acting director of the Campaign for Science and Engineering, said that “one thing we haven’t heard much about is the ring-fence, which has been protected in successive spending reviews by this and the last government…So we can’t be complacent that we’ll definitely have a ring-fence.”

She added that a ring-fence could not only prevent “raiding further down the line”, but serve as “a very useful tool signalling that the UK is a safe bet as a place for investment if you’re, for instance, an international company”.

Ms Weir also highlighted the potential for “tucking in” – bringing other areas of spending into the research budget and expecting it to cover more.

She added: “Even if we have a headline message of protection of science at flat cash, or perhaps slightly more than that if they include the capital settlement…we’ll be carefully looking to see what’s inside there.

“And if that flat-cash ring-fence has in fact been a real-terms cut because it’s expected to cover more, that won’t go unnoticed.”

john.morgan@tesglobal.com