UK Higher Education Hit with £500 Million Budget Cut. (December 28, 2009)

Last week Peter Mandelson, Britain's First Secretary of State, Secretary of State for Business, Innovation and Skills, set out the cuts in next year's higher education budget. It includes the £263m that was already known about but in addition introduces an additional £270m cut. The £533m (A$962m) cut reduces universities' governmental allocation to £7.3bn, i.e. a cut of about 7%.

Lord Mandelson also is putting pressure on the universities to overhaul how they teach degrees, and increase their offerings of  shorter, two-year degrees and flexible courses. In addition there is a general expectation that the current cap on undergraduate fees of  £3,225 will be significantly raised.

On the other hand the high ranking research-led universities will be more protected from the cuts because the cuts will not affect next year's research budget, of which they receive the bulk. Furthermore,  Lord Mandelson has already called for a greater concentration of research funding which seems to be the government's reaction to the most recent RAE findings showing an increasing faction of top rate research being carried out at lower ranking universities, which has meant an increased spreading of the research pound around the university sector.

Whether or not this top down attempt to lessen the effect of the RAE is beneficial for British university-based research is at best a moot question.

Even Wendy Piatt, the director general of the Russell Group of universities sees matters as a curate's egg, saying: "In a very difficult economic climate it is welcome that the department has maintained the increase in research funding previously promised … We are concerned, however, that the cuts to universities' teaching budgets and capital projects will be particularly challenging. Reducing the amount of funding per student will create real and long term difficulties for UK universities and will only serve to undermine the quality of the student experience."