Treasury threatens 3% cut

The government is considering substantial cuts to university funding as it prepares to finalise its public spending commitments up to 2004.

Cuts of up to 3 per cent a year in the unit of public funding are being considered by officials at the Department for Education and Employment and the Treasury.

If universities' income from private contributions to tuition is factored in, then the total annual cut in the unit of funding is reduced to 2 per cent in both 2002-03 and 2003-04. But this is still double the annual cut endured by the sector between 1999 and 2002.

The results of the spending review 2000 are due in July. Universities had been hoping for an improvement in the 1 per cent annual cut, including the possibility of level funding. The latest news is hugely demoralising for the sector.

Tony Bruce, policy director for the Committee of Vice-Chancellors and Principals, said: "This is the kind of figure being bandied around at official level in the department. We are still some way from the final settlement but a settlement at this level would be extremely disappointing. How much more pain can the sector take?" Mr Bruce said that even a continuation of the 1 per cent annual decrease would have been acceptable if there had been extra money ring-fenced for widening access and improving teaching, including lecturers' pay.

He said: "The higher education sector wants to contribute to the knowledge-based economy and widening-access agenda, but neither of these areas are cost free. If we are not going to get the investment then we are not going to make the progress the country needs."

A 3 per cent cut in public funding would stretch the sector to breaking point. Higher education is already struggling to meet the government's target of an extra 100,000 students in higher education by 2002. Additional students, many coming from disadvantaged backgrounds, can be expensive to recruit and to educate.

Following the row over Laura Spence, education secretary David Blunkett has signalled that he wants universities to do more to recruit people from disadvantaged back grounds. But universities say they need more money to do so.

The Russell Group of research-led universities is considering charging undergraduates more for tuition in order to raise income. The prospect of less public cash per student will do little to dissuade them of the case for top-up fees.

The CVCP, which is conducting a wider inquiry into university funding, is to consider alternative sources of income.

Lecturers' unions are also dismayed by the possible cuts. They continue to hope that there will be extra money in the spending review to fund part or all of the pay recommendations in the Bett report. They warn that quality would plummet as universities tried to grow their way out of financial crises through student recruitment. Widespread industrial action would follow, they say.

David Triesman, general secretary of the Association of University Teachers, said: "I too have heard the same figures from mandarins at the Treasury. If this comes to pass then it means that those in power have decided that a world-class university system is dispensable."

Tom Wilson, head of universities for lecturers' union Natfhe, said: "I am appalled at the prospect of what would be a catastrophic cut. It would almost certainly lead to calls for widespread industrial action."

Natfhe conference, page 5