Potential Impact of Government Spending Review Revealed

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The University expects to lose between 65% and 70% of its budget for teaching by the 2014/15 academic year as a result of government cuts to higher education teaching budgets. The University plans to make up this deficit with a ‘very substantial increase’ in tuition fee rates for home and EU students.

As the University has a high proportion of students in the protected science, engineering and clinical subjects, it will not feel the full force of the 80% reduction in teaching budgets. However, the phrase ‘a very substantial increase’ will raise concerns that the University will seek to charge students the maximum £9000 annual fees.

The cuts to teaching budgets are not the only financial risk to come out of the policies adopted of the new government. The University notes that the freeze on research funding will mean an effective reduction in funding of 10% by 2014/15. They also recognise that falling student demand, caused by the prospect of higher debts, could cause financial difficulties.

Despite these threats, the University currently finds itself in a strong financial position, producing a surplus of £8.5 million in the last financial year. Income increased by 6.2% to nearly £420 million for the year. This is a result of both increasing the revenue from tuition fees by recruiting more students, particularly international students, and boosting the income from research grants and contracts to £96.3 million.

However both of these strategies have been criticised. Increasing student numbers have been linked to overcrowding on campus, the University itself noting that the policy could have ‘significant… implications for the overall student experience.’ The policy of increasing revenue from research grants also came under scrutiny during the decision to ‘disinvest’ from Sports Studies degrees last academic year.

The university has also managed to control the costs of staff salaries, which rose by only 0.6% in the last financial year. This is linked primarily to the voluntary severance scheme which may see 250 administrative staff leave the University.

The full financial review can be accessed here.

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