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Clawback begins: extra places will fall by half

Modernisation fund takes a hit as government cuts £200m from higher education. John Morgan reports

The coalition government is to cut £200 million from this year’s higher education budget, reducing by 10,000 the number of extra student places for this autumn.

The £270 million university modernisation fund – designed to fund an extra 20,000 places and unveiled only in March – was one of the areas of public spending singled out in the government’s move to cut £6.243 billion from its budgets this financial year.

The fund will be cut by £118 million and reduced to 10,000 extra places. Universities must also find £82 million in efficiency savings this financial year.

This is out of a total higher education budget of £7.3 billion.

George Osborne, the chancellor, and David Laws, the chief secretary to the Treasury, announced at a press conference today that the Department for Business, Innovation and Skills – which includes higher education – would have to save £836 million as a whole. That is the biggest saving required from any department.

Mr Laws said: “We will proceed with the higher education modernisation funding for an additional 10,000 places.”

But he added that “good value-for-money bids” had not been received for all of the 20,000 places, meaning that the government would be able to “make a saving here”.

The fund was announced in the last Budget, in March, by Alistair Darling, who was then chancellor. It was designed to allow universities to provide 20,000 more places, mainly in science, technology and engineering subjects. The places were funded for the first year, but the pot of money also included cash to allow universities to find efficiencies to fund the subsequent years.

john.morgan@tsleducation.com

Readers' comments (2)

  • I graduated in with my BA in 1985 and had to leave the country and become part of what I believe is known in the UK academic field as "the lost generation." At various stages in my international academic career, I could have come back to the UK and I must say I was tempted. Don't slag off foreigners coming to the UK to study. I am not the only academic who had no choice but to look to foreign parts for an academic career when things got almost impossible in the past. Things work both ways you know. I have had my say, so I better get back into my swimming pool now.

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  • The £200m modernisation fund shortfall means that the international education sector will play an even more important role as universities try to recover from cutbacks. However, while the fees foreign students bring to the table are obviously essential for the survival of our HE sector, there is more to it than that. VCs regularly inform us that their domestic students expect to be exposed to cultural and national diversity, in preparation for a globalised workplace. The market for legitimate non-EU students is under threat, as the UKBA looks to finalise its drawn-out process of revising the (currently extremely confusing) visa requirements for international students, to ensure the UK only approves genuine applications. While the new Tier 4 points-based system awaits finalisation, we are losing students to the US and Australia amongst many others. These legitimate 'education tourists' have their hearts set on studying at a globally-renowned UK higher education institution; fund themselves while also subsidising the tuition fees of Britain's domestic students; can gain 6 or 7 A's at A-Level (if they prepare for university in the country); stay for 3-5 years; and at the last count, contributed £28 billion (based on figures from 2003-2004) to our GDP. Alienation of this demographic would be detrimental to both the economy and our universities.

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