Reporter 407, 6 October 1997


Funding boost fails to solve long-term deficit

Education and Employment Secretary David Blunkett’s announcement of a boost of £165m for higher education has been welcomed, but a funding predicament remains with the Government still refusing to promise that money from student tuition fees, to be introduced next year, will be ploughed back into universities.

The HE funding crisis was further underlined by a report revealing that four-fifths of universities surveyed were unable to teach effectively because of inadequate equipment.

Blunkett’s announcement could release another £1.5m for the University of Leeds next year, against a shortfall for this year and next of £4m. Finance Director Berenice Smith said the extra cash was welcome, but still left the University with a major financial headache. “Our attempts to break even on recurrent expenditure must continue unabated,” she added.

The new money – for 1998/9 – is less than half the national funding gap identified by the Dearing Report of £350m and it does nothing to alleviate this year’s shortfall. Universities are facing a further gap in funding of £565m in 1999/2000.

Spending plans for HE assumed a reduction in real terms of expenditure per student of 6.5 percent over the next two years. The new money reduces this figure to a cut of 1 percent for 1998/9.

The extra funding was released by a decision to pay student loans in three tranches, rather than once at the beginning of the year. Blunkett said the package would help universities “improve standards”. But the Government is giving no commitment in advance of the autumn spending review that the estimated £150m income from the introduction of tuition fees will be ring-fenced for HE.

A University of Manchester report published last week revealed that UK universities and colleges need £400m to update their teaching equipment and facilities. A study last year on research equipment found that nearly 80 percent of departments were unable to perform critical experiments because of lack of funds.

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