Universities UK submits to spending review
David Kernohan is Deputy Editor of Wonkhe
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On behalf of the “larger end” of the higher education sector, Universities UK have published a submission to the Westminster government’s ongoing comprehensive spending review (CSR).
There’s no statutory requirement for UUK to do so – indeed, anyone who fancies submitting something for consideration during the CSR negotiation process was able to do so, with a 9 February closing date.
It is the Department for Education that will be making arguments to the Treasury about spending on its policy portfolio – the UUK submission is designed both to suggest useful policy interventions and to strengthen the hand of DfE in arguing for key sector “asks”.
UUK’s submission is, essentially, a mapping of the earlier “blueprint for change” to the government’s “missions”. While recognising that reform will be required to unlock additional funding for the sector, UUK has essentially presented a shopping list: should there be money available for higher education, this is what it feels additional funds could be spent effectively.
Under growth, the submission calls for an uplift to the Strategic Priorities Grant (the OfS funding stream that supports high-cost subjects, among other priorities), a real terms increase to QR (non-ringfenced research) related funding and the Charity Research Support Fund, additional money for innovation, investment in collaboration, and improvements to the attractiveness of the UK as a “first-choice study destination and partner”
The opportunity mission would be supported by an uplift to student maintenance (including the return of grants for the most disadvantaged students), a Tertiary Education Opportunity Fund, and the commitment of funds to the Turing scheme.
While it doesn’t map neatly to a mission, there are recommendations that deal with ensuring a sustainable higher education sector: an ongoing index link for annual tuition fee rises, a sustainable pension settlement, flexibility on VAT for shared services, and a transformation funding regime to support struggling providers.
While at first glance this reads like some quite “spendy” asks, the detail demonstrates that – in the main – UUK is looking for the restoration of the previous real term value of many of these funds, supported by evidence as to the impact of such spending on the wider economy. A subtheme would be the reversal of previous, detrimental, policy decisions: for example on international student recruitment and Teachers’ Pension Scheme contributions.
The only really new bits of money on the list are the Tertiary Education Opportunity Fund (which is basically an extension of Uni Connect), and the “transformation funding” that feels a lot like the government financial support scheme available during the pandemic restrictions.
The overall ask seeks to restore rather than further enrich the higher education sector as a part of what is likely to be a very constrained allocation of public funding. UUK’s submission does a decent job in modestly asking for the restoration of previous funding levels – whether the impressive evidence is enough to convince the Treasury remains to be seen.
Giving the post-92s the option of de-coupling from TPS males a lot of sense. As autonomous bodies, a natural person in law, providers should be free to determine their own pension provision. This also has the advantage of potentially increasing the competitiveness of the sector. If these freedoms are forthcoming I’d be amazed if any post-92 opts to join USS. De-risking and taking control of costs suggests a DC solution would be the most appropriate.
But if post-92s opt not to join USS then that’s two fingers up for shared services. Odd that the UUK case doesn’t join these dots up.
The sector does well on shared services (UCAS, JANET, USS etc) at a national level and there are a small number of localised examples (eg Uniaudit, local procurement consortiums). But locally, providers are way to self-obsessed about their own self importance to share locally. Any why should they, arguably local service provision of part of their competitive edge – not that the likes of KPMG or PWC would say that, but then they are in the game of selling consultancy reports. Strange how the big professional service providers don’t share any back-office services themselves. At a superficial level there’s a really compelling case for shared support services, its so compelling that hardly anyone has dipped their toe into the water, even if providers live next door to each other, in the same cities and towns. Sounds good in theory, it won’t work in practise. Its hard enough to get academic departments to co-operate and share services, equipment, procurement, because each is very special and unique.
Pension reform is a systemic must for the whole public sector but a wicked problem. The government proposals to use LGPS surpluses to fuel growth seems wrong and should just be used to reduce ER contributions and costs to HE and others public bodies.
The obvious issue the Universities will continue to dodge is that Research needs to be more concentrated to real centres of excellence that can afford to subsidise it. Whatever any one says Teaching still washes its face but Universities are incentivised to sustain hugely loss making research with no accountability for this. On the inside people we say that’s what they’re here for. From a taxpayer perspective they should be expected to ensure it is sustainable. Or not do it. Harsh but fair.