Pre-Budget Report


Universities will be feeling the squeeze as they are told to become more “efficient” in December’s Pre-Budget Report. It is almost certain that universities across the country will have their funding cut under proposals to come in with 2010’s Budget.

The degree of cuts in university funding is yet to be decided and the situation will be clearer once the review of higher education funding and student finance, by Lord Browne, has been published following the General Election in May.

The size of the expected cut is at least £533 million, a figure put forward by Lord Mandelson, the Business Secretary, in December. As well as this, and according to senior sources within the Government, the bulk of those cuts could be found within the student support budget. This could mean that it will be harder for students from poorer families to move away from home and have the same choice of universities they have at the moment.

Another reason for concern is the fact that the Higher Education Minister, David Lammy, said in the House of Commons that the cuts would amount to 4 – 5% of the government spend on Higher Education, Science and Research. This has sparked concern as it may force a drastic reduction in the amount of research the UK can do, potentially crippling the economy in future years. One way universities are coping with this around the country is disinvesting in certain courses, particularly the ones where there are issues around research funding.

The Spring Budget is not the only problem universities face. They will also be fined £3700 per student above their quota, in an effort to combat universities taking on more students than they are supposed to.

Also suggested in Mandelson’s report were shorter two-year degrees and providing flexible courses. For some degrees this may make sense, but for others it will mean that degrees will get harder and necessary skills might not be taught.

The Pre-Budget Report also confirmed the reintroduction of the 17.5% VAT rate at the beginning of this year, which should not affect the cost of living for students immediately. As the term carries on, however, prices are likely to rise as shops try to improve the amount of profits they receive, making the weekly shop more expensive for both students and their families.

The Pre-Budget Report was not all bad news. The guarantee to anyone under the age of 24 of employment or training after 6 months of unemployment will mean that anyone leaving university will be given a helping hand and graduate unemployment may be reduced. This time frame is a cut from the originally proposed 12 months.

There is also going to be financial support for 10,000 under-graduates from poorer backgrounds to get internships, helping a selection of students who would otherwise be unable to gain relevant experience.

Whether the Pre-Budget Report becomes the actual Budget or not will be discovered in the spring, but whatever it contains hard times are ahead for universities, students and their families, but recent graduates the future looks a little brighter.

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