University Grants (Hansard, 4 April 1979)

§ Mrs. Shirley Williams

The Estimates published last Friday, which are subject to Parliamentary approval in due course, provide for recurrent expenditure and for furniture and equipment in the universities. Following the now established pattern I will give the amount of recurrent grant intended in the academic year 715W 1979–80 and provisional indications for the following three years, on the same price basis as the grant for 1979–80. I must emphasise that the figures for later years should be regarded purely as a basis for planning: like the figures in Cmnd. 7439 they do not represent firm commitments and are subject to revision. In successive years the indicated grants will be revalued: that for the first year will then be settled in the form of a cash limit while those for later years will remain provisional indications of grant only: a provisional figure for the fourth year will be added on each occasion.

The provision for the universities' recurrent grant for the academic year 1979–80 is £714 million. This is a cash limit. The provisional figures for later years at constant prices are:

					millions
1980–81	…	…	…	…	£731
1981–82	…	…	…	…	£750
1982–83	…	…	…	…	£755

In arriving at these figures the following assumptions have been made:

(a) tuition fees will remain constant in real terms;
(b) the number of university students will grow to about 291,500 in 1979–80 when 244,300 are expected to be undergraduates and 47,200 postgraduates and will reach 310,000 in 1982–83 when about 16 per cent. might be postgraduates;
(c) the student population will remain roughly equally divided between arts and science.

The 1979–80 grant, which covers the academic year from August 1979 to July 1980, is calculated on the assumption that prices will have risen compared with the previous year by between 8 per cent. and 9 per cent. and that pay will increase by 5 per cent. from the relevant settlement dates in the period. In the calculation, allowance has been made for the second stage of the correction of the non-clinical teachers' pay anomaly and the second stage of the special increases for clinical teachers—in line with those for hospital doctors.

In determining the base line grant for these assumed increases in pay and prices, an adjustment has been made to allow in full for the actual rate of price increases occurring in the universities in the academic year 1978–79. For pay the baseline figures include the 12-months cost of pay increases in the current academic year at 716W 5 per cent., the first stage of rectifying the non-clinical teachers pay anomaly, and the first stage of the special increases for clinical teachers—in line with those for hospital doctors. The cost of a rise of £3.50 a week for the low paid, in accordance with Government pay policy, has also been taken into account.

The academic year 1979–80 spans the financial years 1979–80 and 1980–81. For the financial year 1979–80 the Government's policy in respect of cash limits is set out in "Cash Limits 1979–80"—Cmnd. 7515. The assumptions for pay and price movements to be adopted for other cash limits for the financial year 1980–81 will not be decided until later in 1979: if they are different from those set out above consideration will be given to making appropriate adjustments to the universities' grants from 1 April 1980.

I can also announce that the Government have added £8.1 million to the recurrent grant for the academic year 1978–79 in recognition of various changes in the assumptions underlying the original grant of £619 million. In particular, the cost of the first stage of rectifying the dons' pay anomaly and the promulgation of the 5 per cent. pay guidelines in place of the 6 per cent. to 10 per cent. originally assumed, have been taken into account.

The provision for furniture and equipment for 1979–80 is £51.1 million. This is a cash limit. In calculating this grant an allowance of 8 per cent. to 9 per cent. has been made for price increases. The provisional figures for later years at constant prices are:

					millions
1980–81	…	…	…	…	£55.6
1981–82	…	…	…	…	£56.8
1982–83	…	…	…	…	£56.0

Last year I was able to announce a furniture and equipment grant which, in real terms, was 11.5 per cent. higher than that for the previous year. This year I have planned for a further increase in real terms of 10.1 per cent. These substantial increases will, I am sure, be welcomed by universities as an important contribution to their research capacity.