It’s all about the money, money, money

It’s been a busy week for publications about funding for universities, student numbers and the winners and losers in the next round of HEFCE allocations.



(from Under Creative Commons licence)

As we all know, funding for HE is increasingly tight, particularly with the “miscalculation” that led to significant amounts of loans being made available to students on sub-degree courses at private providers, and the need to support a further 30,000 student places as announced in the Autumn Statement. Andrew McGettigan has provided excellent commentary on the growth of private providers, both on his blog and in an article for The Guardian. McGettigan suggests that the cuts in teaching grants to universities are being made to compensate for the overspend on students at private providers, and that the “major fiscal challenge facing BIS is self inflicted”.

HEFCE has published information on recurrent grants and student number controls.

 The overall budget we have set for the 2014-15 academic year is £3,883 million. This budget reflects the third year of the progressive shift of HEFCE grant to the student support budget, to meet the cost of increased tuition fee loans under the Government’s new finance arrangements for higher education. While HEFCE teaching grant is being reduced, the overall resource rate for teaching is set to increase as a result of these higher tuition fee loans. The total HEFCE grant comprises:

  • £1,582 million for recurrent teaching grant
  • £1,558 million for recurrent research grant
  • £160 million for knowledge exchange
  • £583 million for national facilities and initiatives and capital funding

Linked to this, HEFCE have announced their student number controls for 2014-15 entry (remember  the SNC will not exist after this year). As indicated in the Times Higher, Staffordshire University will have its SNC cut by 3% (as a side note, it’s a shame this is one of the rare times that we appear in this periodical). This is not a surprise, but we have to remember that not all of our students fit into the SNC – our portfolio of business is much wider than this, encompassing postgraduate study, work based learning, part time provision and partnership activity.



As well as announcing grants and student number controls, a further letter from HEFCE last week proposed that in future, institutions will need to provide more information to students and others on their income and expenditure.

HEFCE has undertaken (work) at the Government’s request with the British Universities Finance Directors Group (BUFDG), GuildHE, the National Union of Students (NUS) and Universities UK (UUK) to explore the presentation of information on institutional income and expenditure (including tuition fee income). This work aims to support higher education providers in meeting the Government’s accountability expectations, in a way that is mindful of competition between institutions and seeks to minimise additional administrative burden on universities


Institutions are asked to identify a local web-site solution by the end of October 2014, ready to publish information from their 2013-14 audited financial accounts by January 2015.


From the guidance note, the following information is proposed:

hefce finance


This doesn’t seem unreasonable, but I have a few questions.

  • If this is to minimise administrative burden on universities, then why do it at all?
  • Why not provide a central resource based on the data already available through HESA?
  • The proposed infographics look lovely – but will they clearly identify to students the actuality of financing a university
  • And finally, are students the best qualified to judge the expenditure and income of a complex organisation such as a university?

At no point would I suggest that we shouldn’t provide information to students and other stakeholders, but over the years the amount of data available is increasing (league tables, KIS, Which? university guide) and just providing more does not necessarily allow people to make better decisions.


Oops, we got the sums wrong

Interesting times ahead as it became apparent on Friday that the RAB charge has increased again, and that we are now at the point where the cost of running the current funding system for teaching in universities is becoming more expensive than the previous system. This is not going be a palatable story for government, for universities and tax payers (hardworking, of course).

Basic sums on a blackboard
image by – gratuit

According to the Guardian

Nick Hillman, who worked for Willetts during the introduction of the policy, made the comments after it emerged that the rate of default on student loans is now so high that the £9,000-a-year tuition fees system could end up producing zero financial reward for the government.

Speaking to the Guardian, Hillman called for action to address the “big funding gap” looming in the universities sector caused by mistakes in the government’s modelling and the fact that graduates are earning less than expected.

Last night, the Universities UK alliance of higher education institutions urged the coalition to open talks with Labour on the issue, saying it was vital to think more carefully about how universities can be paid for.

Clearly the funding system has faults, and needs to be reviewed – the news earlier in the year of the amount that had been spent supporting students on sub-degree programmes at private providers seemed to come as a shock to many.

David Kernohan, at Followers of the Apocalypse provides his own take on this news, suggesting the following plan:

  • another independent inquiry into HE funding
  • the need to keep student number controls a bit longer
  • why does the graduate job sector look so bleak
  • Nick Clegg should apologise
  • review the idea of marketisation…..

Not sure the last 2 are going to happen, bu there is merit in the first 3.

And then two days later, this story is published, again in the Guardian:

Willetts told Channel 4 News the government is “committed” to the current tuition fees system, which ministers believe is “far more sustainable than any alternative”. He also dismissed warnings that it will not bring in enough money to fund universities, saying the estimates of how much students will repay are likely to “bounce around” depending on what experts are forecasting for earnings over the next 35 years.

But, pressed several times on whether fees would have to rise or graduates would start having to repay money sooner, he said: “We’ve got a system with a £9,000 fee and a £21,000 [earnings] repayment threshold. That is our system that we are committed to. Above all it means students don’t have to pay upfront… We have fixed the fees for £9,000 for this parliament.

“But we will have to see how the income of universities performs. But we have a structure for £9,000 and £21,000 and that is working.”

Cathy Newman, a Channel 4 presenter, tweeted that she asked Willetts the question again about the possibility of higher fees after 2015 as he was leaving the studio and the minister replied “could be”.

I’m not going to claim that a single off the cuff comment reported on Twitter can be considered a policy announcement, but this would not be a surprise. Some universities are already pressing for the fee cap to be removed, as they don’t feel that £9000 covers their teaching costs. Removal of the cap would satisfy the neo-liberal argument of opening higher education up to “the market”.

Clearly this a time for the various university mission groups and representative bodies to create a consistent and powerful message about how we believe universities should be funded, to ensure that those who can benefit from higher education will be able to do so, and to support the wide diversity of our sector.

Last year, Steve Smith suggested that another avalanche was coming,and that it was financial not the MOOC revolution being promoted by Sir Michael Barber and Pearsons. Looks like Professor Smith was right.