Pips squeak

George Osborne announces in-year cuts to university funding, writes Alison Goddard.

Some £450 million will be slashed from the budget of the Department for Business, Innovation and Skills in the current financial year, the chancellor of the exchequer announced yesterday. Instead of lessening public spending cuts over the coming years, George Osborne intends to flatten the rollercoaster profile of his deficit-reduction plans by making cuts now as well as in the future. The Financial Times quotes him as saying: "When it comes to living within your means, the sooner you start, the smoother the ride." Science is being protected: the department has accepted a 5 per cent cut to the non-science resource budget for 2015-16. Higher education accounts for most of the department’s spending. We have an article which reports that the Treasury has instructed the department to ensure that the cuts have no impact on the provision of certain subjects including science, technology, engineering and medicine. So they must be made elsewhere in university budgets.

Andrew McGettigan has a blog post which argues that the money could be saved by converting maintenance grants into loans. Alas the idea cannot be used to make in-year savings. Thus it appears that the Higher Education Funding Council for England was prescient in its advice, issued alongside its funding allocations to institutions in March, when it said: "Any subsequent changes to the funding available to us from government for 2015-16, or that we have assumed for 2016-17, are likely to affect the funding we are able to distribute to institutions in the 2015-16 academic year. This may include revising allocations after they have already been announced. Accordingly, institutions should plan their budgets prudently." A source in the Treasury told me yesterday that universities had prospered under the current funding system in England and that "it is only right that they play their part" in the deficit reduction plan.