Higher Education
“Access to higher education is a basic tenet of economic success in the global race” - George Osborne, Autumn Statement, 2013
Headline announcements
The Government will remove the “cap on aspiration” by raising the current student recruitment cap ceiling at
publicly-funded higher education institutions in England by 30,000 places for the academic year 2014-15, and removing it completely by the academic year 2015-16. It is estimated that this will enable universities to attract up to an additional 60,000 young people per year. Student number controls for alternative providers in the academic year 2014-15 will be on the basis of their 2012-13 levels and from the academic year 2015-16 the cap on numbers will also be lifted.
The additional outlay from BIS to cover the cost of removing the cap on student numbers-an estimated £600 million in 2015-16, £1.2 billion in 2016-17, £1.7 billion in 2017-18 and £1.9 billion in 2018-19-will be covered by proceeds from the sale of the Student Loan Book which will be sold off in stages over 5 years, starting in 2015-16. It is expected to generate between £10bn and £15bn in sales. The Treasury cites recent research(‘The Impact of Universities on the Lifecycle of Earnings: Some Further Analysisf rom the Department for Business, Innovation and Skills (BIS) stating that the average net return over a lifetime of degree-educated individuals is around £165,000 for men and £250,000 for women, even after tuition fees and other costs of attending university are taken into account. It is hoped that the increase in public funding for student loans will be paid back through recouping more tax from more people earning higher wages throughout their careers.
The BIS research states that the above figures are “simulations of lifecycles of earnings from a statistical model of gross earnings and are adjusted for tax and National Insurance liabilities, periods of non-participation, and for the effect of the loan scheme, and discounted at 3.5%.”
The Chancellor pledged an extra £185 million funding for STEM subjects over four years starting in 2015-16. Further details from BIS will follow in due course.
Sector response
Higher Education Funding Council for England: “Removing controls on the numbers of students entering higher education will give more people the opportunity to benefit from higher education. We welcome the additional support for STEM subjects, which will help universities and colleges to capitalise on the upturn in demand in these areas and support economic growth.”
Professor Michael Gunn, Chair of university think tank million+: “The decision to reinvest future proceeds from the sale of the student loan book in higher education is important and one for which million+ has long made the case. Universities and students will now want to know that this expansion is being funded on a sustainable long-term basis and that the means of paying for it really do add-up.”
Russell Group: “quality higher education should be prioritised over quantity, especially in times of limited funding. The Chancellor’s commitment for extra funding for vital high-cost subjects such as science, technology and engineering (STEM) is good news. But it is important that this money is for investment in existing STEM places and not simply new provision.
Universities UK: “We will need to understand how this is sustainable in the long-term, given that this policy is being funded in coming years by the asset sales. We also need clearer information on future cuts to the BIS budget. Our universities are one of the UK’s most important assets so it is vital for the UK’s future prosperity that Government maintains investment in this area. The long-term commitment to science is also to be welcomed.”
157 group: “We...welcome the proposal to remove HE student number caps, and will be working to ensure that the importance of HE delivered in FE Colleges is increasingly acknowledged”
CBI: “Abolishing the cap on higher education places will help more companies and universities work together to deliver business-relevant courses, and additional support for science, technology, engineering and maths is particularly welcome.”
Social Market Foundation: “Expanding student places makes a lot of economic sense”.
Science and Innovation
“Because science is a personal priority of mine”, George Osborne, Autumn Statement 2013
Headline announcements
The resource budget for BIS will be cut from £157 million in 2014-14 to £148 million in 2015-16.
Spending pledges include:
- £270 million over 5 years to fund a network of Quantum Technology Centres to support translation of quantum research into application and new industries
- £400 million over 5 years fund to improve the research and innovation capacity of Emerging Powers and build research partnerships for the UK
- £80 million over five years for a Global Collaborative Space Programme
- Prize fund of £10 million for consumer testing of driverless cars, including a review, reporting by end 2014 to ensure the legislative and regulatory framework supports the world’s car companies to develop and test driverless cars in the UK
- Higgs Centre at Edinburgh University to provide cutting edge academic instrumentation and big data capabilities to support high tech start ups and academic researchers specialising in astronomy and particle physics
- £5 million during 2014-15 for a large scale electric vehicle-readiness programme for public sector fleets aimed at promoting the adoption of ultra low emission vehicles, demonstrating clear leadership by the public sector to encourage future wide-spread acceptance
- New tax relief for shale gas, and increase support for employee ownership and the creative industries
- Research Partnership Investment Fund – over £1 billion of public and private investment in 20 joint university business science and technology research projects
- Science capital funding to increase by £500m in 2015-16 to £1.1 billion
A Science and Innovation Strategy will be published in conjunction with the 2014 Autumn Statement. The Strategy will outline the Government’s ‘roadmap’ for science capital announced in the 2013 Spending Round, which set the target of keeping the overall science capital budget in line with inflation each year to 2020-21.
Member Bodies and other responses
Institute of Physics: “To hear the Chancellor emphasise his own conviction for science, and the contribution it makes to the UK, while also guaranteeing continued support for science, technology, engineering and mathematics at university is very encouraging; long may it continue.”
Institution of Chemical Engineers: “Today’s announcement should only be the start of a long-term commitment to invest in science, technology, engineering and maths”.
Royal Society of Chemistry: “... we urge the Government to keep its promise to fully maintain the ring-fenced science budget. To keep Britain ahead in the global economic race, it's imperative that we maintain a strong science base."
Society of Biology: “We will continue to support investment in science, and await future announcements, specifically in light of the stated reductions in departmental resource budgets.”
Royal Society: “The (Emerging Powers Research) fund announced by the Chancellor today will allow the UK to further capitalise on our competitive advantage in science to drive forward our own economic interests and global advances in areas such as health and energy.”
CASE Director Sarah Main: “I’m worried that BIS may look to science and higher education to absorb the £300m savings and that this may have a damaging effect on our research capability. Our researchers are already struggling with a flat cash budget since 2010 that has been eroded by £266m by deflation to date.”
Also announced
The Local Growth Fund, which brings together transport, skills and housing funding for local authorities, will be maintained at £2 billion in each year from 2015 to 2021.
The Government committed to delivering with Greater Cambridge their proposals on Gain Share - a payment by results mechanism whereby the local area will be able to keep a larger proportion of the proceeds of economic growth generated in, and around, the city of Cambridge. The Government will announce details on how this proposal will work in the 2014 budget statement.
From April 2014, the Government will introduce a new social investment tax relief to encourage individuals to invest in social organisations. The relief will be available for equity and certain debt investments in charities.
Her Majesty’s Revenue and Customs will develop a new IT system to allow charities that want to register with the Charity Commission for England and Wales, and also to apply to HMRC to claim charity tax reliefs, to submit their applications through a single online portal.
