Leader: Things can only get worse

On the night that Tony Blair was elected to his first term as prime minister in 1997, he famously jigged to the beat of the D:Ream hit Things Can Only Get Better.

Things did get better for a while - not least for one member of D:Ream, Brian Cox, who transformed himself from minor pop star to the face of science for a generation, and cheerleader for Britain's investing to become the best place in the world to do research.

Today, though, the optimism of the late 1990s is long gone and the zeitgeist is summed up instead by the title of a new analysis from the IPPR thinktank: Tough Choices Ahead.

The report looks at the likely outcomes of the next spending review, with the government required to set out plans for 2015-16 at the very least before the 2015 general election.

In the current spending review period, which ends in 2014-15, departmental spending cuts have averaged 2.3 per cent each year. However, the NHS and schools budgets have been protected, so the cuts for some other departments have been higher.

The IPPR report highlights the broad plans already published for public finances in 2015-16 and 2016-17, which aim to move the country to a budget surplus by the end of this period.

But it also warns that these plans are based on outdated economic forecasts and that, with growth forecasts lowered, the targets as they stand are unachievable.

Why does all this matter to universities? Because if the analysis is right, the government will need to make much deeper cuts than currently planned in 2015-16 and 2016-17 in order to hit its self-imposed targets.

This could mean a real-terms cut in spending of 3.8 per cent, on average, for those two years, and if the NHS, international development and schools budgets are protected, that could rise to an average of 8 per cent for other departments.

The IPPR does suggest some alternatives. One would be a huge cut in welfare spending, and another would be shifting the goal of achieving a budget surplus back to 2018-19.

These are tough choices indeed, and there is no escaping the feeling that higher education is in real danger of finding itself back on the chopping block.

This point has been made before (Sir Alan Langlands, chief executive of the Higher Education Funding Council for England, has warned of universities looking "dangerously well-heeled" in light of tuition-fee income), and vice-chancellors speak privately of fears for the research budget, one of the few pots within the Department for Business, Innovation and Skills big enough to be a target for future savings.

While cutting research funding might seem mad, and the Lib Dems have come out strongly against such a move at their party conference this week, raiding what remains of teaching funding would be equally hard after the promises made to students about the improvements they will enjoy now they are paying higher fees.

So higher education has a battle to avoid the Parliament ending as it began, with public investment declining.

Such a scenario would not merely strip universities of the heels referred to by Sir Alan, but would also risk cutting them off at the knees while their international rivals grow in stature.

john.gill@tsleducation.com.