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Government cuts HE funding and criticises VCs pay rises

Ministers have told universities to curb substantial increases in vice chancellors salaries as they announced a bigger than expected cut in funding for higher education in England.

Public funding overall for 2014-15 will be cut by £125 million more than was forecast, falling from £4.216 billion as indicated last year to £4.091 billion under the revised plans. A further drop in funding to £4.008 billion is expected in 2015-16.

The Government has asked the Higher Education Funding Council for England to deliver the reductions in ways which protect as far as possible high-cost subjects (including STEM), widening participation, and small and specialist institutions.

However, funding for the Access to Learning Fund which gives discretionary grants to the poorest students has been removed, and the Fund "merged" with the student “opportunity fund” which supports students from disadvantaged backgrounds, worth £322 million in 2013-14.

The Government says the net reduction in recurrent funding for teaching for 2014-15 compared with last year's forecast amounts to £45 million. Meanwhile, recurrent funding for research is maintained at £1,573 million for both the coming years.

Hefce said the funding settlement for 2014-15 and the indicative allocation for 2015-16 incorporated “significant reductions” but it would work to implement it in as fair and sensible a way as possible.

In the annual grant letter to Hefce, David Willetts, the universities and science minister, and Vince Cable, the Business Secretary, said they wanted universities to make greater progress in delivering efficiencies, as “students will rightly expect value for the fees they pay”.

The letter raises concerns about “the substantial upward drift” of salaries for university top managers, adding: “We want to see leaders in the sector exercise much greater restraint as part of continuing to hold down increases in pay generally.”

A recent survey found the salaries of vice-chancellors of the 24 Russell Group universities increased by nearly 10 per cent last year, bringing the average salary to £293,000.

Tim Melville-Ross, Chair of HEFCE's Board, said: “At a time of considerable pressure on public finances, the funding settlement for 2014-15 and the indicative allocation for 2015-16 incorporate significant reductions. Nevertheless, the Government continues to recognise the key contribution that higher education makes to the economy and society. We will work to implement the settlement in as fair and sensible a way as possible.”

Commenting on the announcement, Professor Sir Christopher Snowden, President of Universities UK, said: “We are pleased that, as far as possible, high cost subjects (including STEM), widening participation and small and specialist institutions are to be protected but we fail to see how the projected cuts for 2014-15, and the more substantial projected cuts for 2015-16, can be delivered without reducing allocations in these areas.

“Universities have already shouldered substantial reductions in public funding for both teaching and research in recent years and have made £1.38 billion in efficiency savings already. There is clear evidence that universities are delivering an impressive return on public investment and as a result of the Diamond review, work is continuing to see if there are better and more efficient ways of doing things in universities.

“It is right that Government has maintained the science and research ring fence. However, we need a long-term plan to increase research funding above inflation if we are to remain competitive. We already invest too little in research compared with other developed nations.”


Get the full picture from HEi-know: Briefing Report 125