University Grants (Hansard, 13 March 1981)

§ Mr. Mark Carlisle

The estimates for Class X (Education and Science, Libraries and Arts) Votes published on 10 March, which are subject to parliamentary approval in due course, include provision for recurrent grant and for equipment and furniture grant to the universities. The provision for recurrent grant in the academic year 1981–82 is £979 million. This is a cash limit. This figure provides approximately 3 per cent. less in real terms for home students than in the academic year 1980–81.

There is likely to be some reduction in the number of students admitted in 1981–82 but it is hoped that universities will admit, as they have done this year, as many students as they can consistent with their academic 433W judgment. Allowing for the numbers admitted in recent years, the total home undergraduate population in 1981–82 is expected to be about 250,000. Home postgraduate numbers are assumed to remain at their present total of about 30,000. Home students are expected to be divided equally between arts and science.

In accordance with the Chancellor of the Exchequer's statement in the House of Commons on 24 November 1980, and paragraph 9 of Cmnd. 8175, the grant allowed for increases in earnings of 6 per cent. for settlements from 1 October 1980 onwards, with an appropriate adjustment based on the 6 per cent. factor to allow for the change in the settlement date for academic staff; and price rises of about 11 per cent. in the financial year 1981–82 based on the actual level of prices and rates in the academic year 1980–81.

Recurrent grant for the 1980–81 academic year has been reduced by £25.65 million to take account of revised pay and price assumptions for the period 1 April to 31 July 1981 and of the appropriate proportion of the saving of £30 million at 1980 survey prices, in the 1981–82 financial year which I announced in the House on 16 December 1980. A further adjustment for the 1980–81 academic year in respect of capital has been made—see paragraph (f) below. In the recurrent grant for 1981–82 academic year allowance has also been made for a relevant proportion of the higher education savings for the 1982–83 financial year foreshadowed in the Government's expenditure White Paper, Cmnd. 8175.

Following discussions with the University Grants Committee, the grant of £979 million includes:

(a) £20 million which the UGC will allocate specifically for the purpose of adapting the university system to the reduced level of funding which will be available in 1983–84. Universities will also be expected to use their accumulated reserves, under the guidance of the UGC, for the same purpose;
(b) £2-8 million which I am making available to continue the scheme which I announced in the House on 27 November 1979 to help outstanding research students from overseas to attend British universities;
(c) £3 million as a further stage of the resources made available to universities, on the recommendation of the University Grants Committee, to help to ensure that uncertainty about prospective income from overseas students does not adversely affect selected postgraduate work of particular importance to this country, while universities are adjusting to the policy of full cost fees for overseas students;
(d) Provision for overseas students who began their courses prior to the 1980–81 academic year and for students from European Economic countries;
(e) Provision to allow for the new method of student union financing which I announced to the House on 5 February 1980;
(f) £7.99 million for the financing from recurrent grant of building projects previously met from capital funds. £2.249 million for the same purpose has also been added to the grant for 1980–81 academic year.

The academic year 1981–82 spans the financial years 1981–82 and 1982–83. For the financial year 1981–82 the Government's policy in respect of cash limits is set out in paragraph 9 of the Government's expenditure White Paper, Cmnd. 8175. The assumptions for pay and price movements to be adopted for cash limits for the financial year 1982–83 will not be decided until later in 1981: if they are different from those set out above, consideration will be given to making appropriate adjustments to the universities' grants from 1 April 1982.