Magazine article Public Finance

Second Time Unlucky

Magazine article Public Finance

Second Time Unlucky

Article excerpt

Although it is less than one year old, the Department for Innovation, Universities and Skills has been quick off the blocks to make savings. Already its controversial measures are threatening thousands of 'second chance' students in universities, as well as hightech research in physics and astronomy. With only half of the savings announced so far, further and higher education and the science community are fearful of where the Dius axe will fall next.

The department's measures are part of the government's value-for-money programme. Dius has to find savings of at least 3% a year over the three years of the 2007 Comprehensive Spending Review period. But given that its budget will be ?20.8bn in 2010/1 1, critics are wondering why it is set on savings of ?1.5bn - or more than 7% - a year by then.

The government says that overall funding cuts are not intended. Dius should receive an average realterms increase of 2.2% a year over the spending review period. Rather, the aim is to reprioritise and reinvest, slicing money from one area and putting it into another, enabling the government to get more bangs for its bucks', says the department.

In September, Innovation, Universities and Skills Secretary John Denham announced that over the next six years ?100m of funding would be cut for students who already have a higher education qualification, and who are studying for another one at an equivalent or lower level (ELQ).

There are a number of exemptions, including students who are studying for a foundation degree; those who are on courses co-funded with employers; students in medicine and health-related subjects; and those studying strategic or vulnerable subjects, such as science, mathematics and modern languages. Denham told the Higher Education Funding Council for England that the funding could be reallocated in line with its priorities.

To protect higher education institutions with large numbers of ELQ students - particularly the Open University, and Birkbeck College in the University of London - funding levels are being kept constant in current cash terms over the next three years. But by 2014 the Open University is set to lose more than £3 1.6m in teaching funding and Birkbeck College £7.8m. Birkbeck will lose more than one-third of its teaching funding and the Open University almost a quarter. Twenty-four higher education institutions stand to lose at least £2m each and 50,000 full-time equivalent students will be affected.

The ELQ cuts have met with widespread criticism. In January, Professor David Latchman, master of Birkbeck College, told the Commons' innovation, universities and skills select committee that the policy meant: 'We will restrict support for a number of people who are reskilling in order to take advantage of changes in the labour market - women returning to work, people who have had disabilities and so on, and people who simply want to change careers.'

Gemma Tumelty, president of the National Union of Students, added: 'It is ridiculous to think that ELQ students are taught somehow in different lecture theatres to other groups of students. If this funding is cut then what it could do is damage the viability of courses and therefore have an impact across the sector on firsttime students as well.'

And Sally Hunt, general secretary of the University and College Union, which represents academic and support staff, told the committee: 'If we believe that we ought to be supporting and broadening the base of higher education, what we must not do is cherry-pick in terms of funding between the sectors.'

Defending the government's decision, higher education minister Bill Rammell said: 'In order to be internationally competitive, we need to move from today with 29% of adults educated to Level 4 to at least 40% by 2020 and, arguably, we need to go significantly beyond. We took the view that we wanted some further levers within the system to... ensure that universities prioritised the recruitment of students in the workforce who are not yet at first-degree level. …

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