Erica Conway tells the chancellor how Wednesday’s budget could make her dreams come true
Back in November, I was eagerly awaiting an autumn statement from the new chancellor, hoping it would deliver stability. I was looking for policies that would have a positive impact on the stock market, our economy and by extension universities, as well as on our students and staff.
Jeremy Hunt’s statement set out a plan for spending in key areas such as the NHS, social care and schools, much-needed cost of living support for energy costs, and increases in state pensions and the national living wage.
Most of the support schemes for the cost of living came with time limits, and those time limits are ending in the next few weeks. Nor has the focus on inflation delivered; we continue to see price increases for a wide range of goods and services that affect businesses and individuals. Areas of core infrastructure are crumbling, and sectors including universities are engaged in strikes linked to pay and conditions.
Pay restraint has been delivered, but only by failing to agree pay settlements, which means money is not in the pockets of people when they need it and the problem has not been solved. University students and staff are paying more for, well, everything.
Research loss
We heard in February of the Treasury’s £1.6 billion Brexit bonus. This is the amount that was allocated for the support of EU research programmes after Brexit but that will now not be used. For a country with ambitions to be a science superpower and with the government saying that it is committed to increasing R&D spending, this was disappointing.
Research activity will not be undertaken as a result—research that would have responded to global challenges and would have generated the innovation and productivity changes needed to lift the UK out of recession and help solve global issues such as the climate crisis. That matters to us all.
As I turn my attention to the spring budget, I am wondering what we can hope for from Hunt this time. Basic rate tax reductions promised by prime minister Rishi Sunak, costing around £7bn a year, now look impossible to deliver within a balanced financial position. Continuing the current support schemes for energy and fuel duty would be expensive. Money will need to be found to deliver public sector pay settlements when they come. Additional childcare support, carbon net zero tax reliefs, extended business rate relief and other tax reliefs for business investments all seem like dreams in the current environment.
Back when I was a fresh and newly qualified accountant, I remember listening to the budget statement to hear about increases to tax-free allowances, mortgage rate relief changes, VAT increases and alcohol or fuel duty levels. This is no longer the case. Most of these things are either no longer in existence, rarely move or have such an insignificant impact on most of us that they are unworthy of note.
Also, my understanding of the impact of any budget has grown; I am now concerned beyond myself, thinking about my business, the university sector and the UK economy.
Hopes and disappointments
What are my hopes for the upcoming budget? Unfortunately for the chancellor, they are wide-ranging. I want to see effective inflation controls. I want realistic public sector and associated pay awards. I want spending on core infrastructure such as roads, railways, schools and more, to match their needs.
I am looking for support for students and those on lower wages to respond to the increasing costs of living, through easily accessed, targeted help that recognises that most were not able to access schemes to assist with rising energy costs, for example.
I am looking for innovation to support all of us—businesses and individuals—in changing our behaviours to deliver carbon net zero, and a drive to enable a significant shift towards the other UN Sustainable Development Goals.
I want a balanced financial position for the UK economy that is based on data rather than one-line policy statements. And it would be wonderful if that could be funded from efficiencies or changes in spending priorities, with no significant tax increases. All that’s a tall order.
I realise that it is not Christmas and that this is a long wish list. I also appreciate that inevitably I will be disappointed. Before the autumn statement, I asked for two things. The first—stability—Hunt duly delivered. This time, I make a plea for the other thing I sought last time but did not get: a sustained recognition that this country’s universities, along with their students and staff, are crucial for the UK’s longer-term growth and development. Working together, we can achieve so much more and can deliver benefits for the short, medium and longer term for a wide range of stakeholders. Please, dear chancellor, make at least that dream come true.
Erica Conway is chair of the British Universities Finance Directors Group.