Bleak prognosis for health funding budget transfer

Source: Science Photo Library

Dangerous procedure: the plans to shift the medical education budget to the DoH could lead to cuts to per-student spending

Leading university figures have raised the alarm about the plans being mooted to move medical education and research budgets across Whitehall in a bid to avoid huge spending cuts to the academy.

The proposals to shift the budgets from the Department for Business, Innovation and Skills to the Department of Health are said to be part of last-minute efforts to achieve the 10 per cent reduction in BIS spending reportedly being called for by the Treasury, which would amount to a £1.5 billion cut.

Transferring the cash for medical education from the Higher Education Funding Council for England to the DoH could save around £300 million from BIS’ budget, Times Higher Education estimates.

Meanwhile, moving responsibility for the Medical Research Council’s resource budget could save an extra £575 million if funding continued at 2014-15 levels.

The plans follow similar proposals from other under-pressure areas of government spending, such as defence and social care, to shift funding into the protected streams of health and international development, which are likely to continue to be exempt from cuts.

Sir Steve Smith, vice-chancellor of the University of Exeter and former president of Universities UK, said he could see the “superficial appealing nature of the logic” behind the transfer route, but said it looked too good to be true “because it is”.

Despite being protected, the DoH budget is already being squeezed because of the rapidly rising costs of providing healthcare for an ageing population, he said.

“The danger is medical education and research go into a budget under the most extraordinary pressure,” Sir Steve said, with the money likely to be “eaten away and used for front-line delivery”.

There were no guarantees that the DoH would receive corresponding increases to pay for the transfers, he added, and it might be forced to absorb the streams into its already pressurised budget. This could lead to cuts to the sums currently spent on medical education: more than £10,000 per year per student by Hefce in 2013-14.

A source familiar with the negotiations said the proposals were not thought to advocate moving provision away from universities.

However, if that “at-worst” scenario were to happen, it could result in “disassociating medical education from research and the university structure”.

An ‘ill-advised’ transfusion

Meanwhile, sector figures have responded critically to rumours about moving the MRC budget to the DoH. The dean of one medical school said that merging the council and the DoH’s National Institute for Health Research budgets would be “ill-advised”.

The dean stressed the differences between the “design, implementation, outputs and evaluation” of biomedical science and applied healthcare research. Combining the two would lead to inequity in funding, which “would ultimately be detrimental to the provision of the highest-quality healthcare”.

Andy Westwood, chief executive of GuildHE, said that while shifting responsibility for medical research - something likely to be seen as a priority wherever it sits - may in the short term seem like a “good political and economic wheeze”, he doubted it would stop cuts elsewhere in BIS.

“And of course, it’s a high-stakes gamble, giving up a jewel in the crown in both research and industrial-strategy terms,” he added.

On Twitter, Richard Horton, editor-in-chief of The Lancet, said that Sir John Savill, chief executive of the MRC, was apparently against the proposal, with the council preferring a 10 per cent budget cut to a merger.

“They want to preserve their independence at all costs,” he added.

Kieron Flanagan, lecturer in science and technology policy and management at Manchester Business School, said he would be surprised if the MRC move went ahead, although a “halfway house” option was possible.

In this scenario, the DoH might share or contribute funding for medical research and education without a wholesale move, similar to how it stumped up £200 million in capital costs for the Francis Crick Institute in 2010.

The proposals to shift medical spending from BIS come on the back of concerns that the savings the department must make will force cuts either to the £4.6 billion science “ring fence” or the £300 million “student opportunity” fund.

The coalition’s spending review for 2015-16 will be unveiled on 26 June.

elizabeth.gibney@tsleducation.com