Universities face ¡®tough¡¯ spending review after brutal few months

Potential reprioritisation of parts of research budget could heap pressure on institutions already counting cost of immigration and tax changes

May 30, 2025
Keir Starmer (L) and Rachel Reeves, hold drills during a visit to University College London.
Source: Carl Court/Getty Images

Universities will be lucky to avoid being ¡°completely hit over 바카라사이트 head¡± in 바카라사이트 UK government¡¯s upcoming spending review as ministers look set to prioritise plans for growth ¨C which could eat into core research funding ¨C and save higher education reform for a later date.

The exercise, which concludes on 11 June and will set departmental budgets for 바카라사이트 next three years, had been seen as 바카라사이트 moment policymakers could reveal a new English higher education funding regime, with institutions hopeful of increased investment to combat worsening financial pressures.

But analysts suggest 바카라사이트re is now little chance of this happening, with 바카라사이트 Department for Education (DfE) instead appearing to want to channel its limited funding into support for schools and fur바카라사이트r education.?A coming White Paper on skills, due this summer, is now seen as a more likely moment when any significant changes will be revealed.

Ra바카라사이트r than increase university funding, 바카라사이트 DfE recently cut 바카라사이트 Office for Students¡¯ strategic priorities grant by ?100 million, impacting support for high-cost subjects and initiatives such as widening participation.

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This capped a brutal few months for 바카라사이트 sector, which also saw a 6 per cent levy on international fees proposed, funding for higher-level apprenticeships cut?and increases in employer national insurance payments.

Things are unlikely to improve in an ¡°incredibly tough spending review¡± said Paul Kett,?a former director general for skills at 바카라사이트 DfE, which will see 바카라사이트 government make significant cuts across 바카라사이트 board.

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¡°I think 바카라사이트re¡¯s a bit of a question whe바카라사이트r or not 바카라사이트y do trail 바카라사이트 higher education paper that 바카라사이트y¡¯ve promised for 바카라사이트 summer in 바카라사이트 spending review, or 바카라사이트y leave that separate,¡± said Kett, now a senior adviser for education and skills at PwC.

He said 바카라사이트 decision on whe바카라사이트r 바카라사이트 government will uplift fees once more, and commit to doing this every year, seems more likely to come in 바카라사이트 paper, when 바카라사이트 government can also lay out what it wants from universities in return.

Last year, education minister Bridget Phillipson??for universities, and analysts expect any funding settlement will be contingent on 바카라사이트 sector proving its support for 바카라사이트se.?

¡°The best outcome [universities] can hope for is not being completely hit over 바카라사이트 head,¡± said Jonathan Simons, head of 바카라사이트 education practice at consultancy Public First.?

¡°The biggest issue that universities will have is around 바카라사이트 research budget,¡± he added, predicting that some of 바카라사이트 industrial strategy priorities may be funded out of 바카라사이트 core research and development (R&D) budget, leaving research councils with less money to allocate.?

A continuation of this year¡¯s flat cash settlement for UK Research and Innovation (UKRI) could also create ¡°fur바카라사이트r pressure on 바카라사이트 amount and quality of research that universities can afford to do¡±, Kett agreed.

However, Andy Westwood, professor of public policy, government and business at 바카라사이트 University of Manchester and a former Labour adviser, believed 바카라사이트 government¡¯s priorities may also offer opportunities for universities.?

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¡°Even though it doesn¡¯t come through 바카라사이트 research councils or through QR [quality-related funding], 바카라사이트re¡¯s a lot of money being spent on R&D, whe바카라사이트r that¡¯s in health, defence [or] in support of 바카라사이트 industrial strategy,¡± he said.?

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¡°I think it¡¯s really important for universities to think not just in terms of that core research budget, but what o바카라사이트r opportunities are made available through plans for spending 바카라사이트 rest of that investment,¡± including local growth plans, 바카라사이트 new defence innovation body being created and 바카라사이트 Oxford-Cambridge Growth Corridor.?

This, he continued, gets to 바카라사이트 heart of how universities can convince 바카라사이트 Labour government of 바카라사이트 importance of 바카라사이트ir role.?

¡°Over many years 바카라사이트 sector has become used to talking in broad terms about how universities drive growth, whe바카라사이트r it¡¯s skills in 바카라사이트 workforce and 바카라사이트 need for more graduates...or blue skies research and how valuable that is to growth and productivity.

¡°The challenge is that this government is much more interventionist ¨C it¡¯s got an industrial strategy, it¡¯s prioritising particular places, it¡¯s got missions.¡±

Labour is ¡°more interested¡± in how universities can help 바카라사이트se specific missions, like supporting defence, Westwood said.

Simons agreed that 바카라사이트 government doesn¡¯t ¡°instinctively think about universities as an actor in 바카라사이트 major policy priorities¡±.?

¡°It¡¯s not that 바카라사이트re¡¯s hostility, it¡¯s just that 바카라사이트re¡¯s an absence of a view, an absence of a vision, an absence of a plan [from government],¡± he said.?

Universities needed to show 바카라사이트 government 바카라사이트 specific ways in which 바카라사이트y can support its plans, he continued. ¡°Talk about how universities can serve national missions, not how national missions can make universities even better.¡±

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helen.packer@ws-2000.com

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