University Grants (Hansard, 12 February 1985)

§ Sir Keith Joseph

The University Grants Committee has announced universities' recurrent grant for the academic year 1985–86 as shown in the table following.

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		including
University or college	Recurrent grant	Earmarked capital in recurrent allocations	Other additions^*
		General	Shared medical
	£ million	£ million	£ million	£ million
Cardiff UC	17.02	0.164	—	0.127
St. David's Lampeter	1.94	0.019	—	—
Swansea UC	13.26	0.125	—	0.121
UWCM	6.62	0.005	0.114	0.044
UWIST	8.49	0.091	—	0.121
Welsh Registry	2.18	—	—	—
Total Wales	70.55	0.587	0.114	0.650
Aberdeen	22.14	0.177	0.063	0.204
Dundee	14.90	0.078	0.106	0.165
Edinburgh	44.10	0.306	0.156	0.801
Glasgow	43.37	0.311	0.177	0.683
Heriot-Watt	10.46	0.103	—	0.171
St. Andrews	11.27	0.107	—	0.138
Stirling	8.07	0.067	—	0.117
Strathclyde	22.62	0.228	—	0.298
Total Scotland	176.93	1.377	0.502	2.577
Total Great Britain	1,184.72	9.000	3.000	19.717
^* Other additions specified in Annex B for each university or college.

The UGC will be writing further to universities about equipment and furniture grant for 1985–86.

Following is the text of the general letter of guidance which the chairman of the UGC has sent to all universities. Copies of the annexes relating to grants for individual universities will be placed in the Library of the House.

RECURRENT GRANT 1985/86 I am writing to give the Committee's decisions about the distribution of recurrent grant for the academic year (AY) 1985/86 (August 1985 to July 1986). The figures for all universities are given in Annex A. Annex B gives details of grants specific to your own institutions.

THE LEVEL OF RECURRENT GRANT FOR 1985/86 2. Recurrent grant for 1985/86 was announced by the Secretary of State for Education and Science on 12 November 1984. He said: Subject to Parliamentary approval, the total of recurrent grant for universities in the UGC list for the 1985/86 academic year will be £1,309m. This total has been set at a level consistent with previously planned economies and with the Government's 3 per cent. assumption for pay. To the extent that the academic year falls partly in the 1986/87 financial year the grant is subject to review in the normal way. 3. The grant of £1,309m. includes provision for the third year of the programme of support for new blood and IT posts. It is £7m. less than the cash figure which underlay the provisional grant distribution for 1985/86 which was announced in Circular Letter 14/84. The reason for this is that the Government has now adopted an assumption that provision for increases in expenditure on pay in the financial year 1985/86 (April 1985 to March 1986) should be limited to 3 per cent. The provision for increased expenditure on non-pay items in that financial year remains at 4 per cent. The provision for cost increases from FY 1985/86 to 1986/87 has not been made explicit but is thought to be nearer 3 per cent. than 4 per cent.

DISTRIBUTION OF RECURRENT GRANT FOR 1985/86 4. The Committee has decided to apply the £7m reduction in year which results from the Government adopting a pay factor of 3 per cent. for FY 1985/86 to the provisional distribution of grant announced in October. The grants of all universities have therefore been reduced on a pro-rata basis. 5. From the total recurrent grant the Committee is making provision for the following:—

	£m
(a) rates: provision for the October 1985 and June 1986 instalments of local authority

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rates grant (assuming a 6 per cent. increase in each of the financial years 1985/86 and 1986/87)	84
(b) capital-in-recurrent grants (see para 13)	6
(c) new blood and IT appointments to be made in 1985	5
(d) the cost of the Overseas Research Students Awards Scheme and of the Universities' Statistical Record etc.	5
(e) computer facilities for teaching	3
(f) items still under consideration (see para 9)	21

6. The amount to be distributed is therefore £1,185m. This includes provision for:

(a) restructuring initiatives and new developments approved over the last two years or so, which are additional to those for which provision is now included in the baseline distribution: details are given in Annex B; and
(b) all new blood and IT posts approved by the Committee in the first two years of these programmes, provision being at the rate of £22,000 for each new blood (science) and IT post and £16,500 for each new blood (arts) post; universities are reminded that in addition to covering the full salary costs of the post holders, the annual grant for each new blood and IT post (which is added to the baseline recurrent grant although not separately identified after the first year) is also intended to contribute to the general research costs and overheads of the departments in which the appointments are made (see Circular letter 1/83).

7. Rates grant will continue to be paid separately because the increases in local authority rates still have an unpredictable and differential effect on individual universities. I expect to announce the Committee's decision on the rates grant before the end of July. Assistance in 1985–86 with the financing of capital projects costing less than £1m will again be made in the form of an allocation of recurrent grant additional to the block distribution, earmarked for capital purposes (see paras 10–12 below). 8. The sum of £3m set aside for computer facilities for teaching in universities will supplement the support being given by the Computer Board for Universities and Research Councils under an initiative begun by FY 1984–85 and continuing in 1985–86. The Committee will be consulting the Computer Board on the use of the £3m and more details will be given about this in due course. 9. The Committee is concerned about the effect on universities' financial circumstances, both of the continuing squeeze on recurrent grant and of the variety of demands from Government for increased expenditure in particular areas. In the face of these pressures, the Committee has decided to distribute on a selective basis the uncommitted balance of £21m. (£4m of 125W the £25m referred to in Circular Letter 14/84 have now been committed, mainly for computer facilities for teaching.) It is not yet ready to take final decisions about the disbursement of this sum but the following are among the possibilities which it is considering:

(a) start-up expenditure to provide for an increase in the number of students in computer science and some aspects of engineering, if the Committee can obtain assurances that the level of grant in future years will be adequate to sustain such an initiative
(b) once-and-for-all expenditure (for example on library automation) which will lead to recurrent savings in future years
(c) encouragement of post-experience vocational education
(d) encouragement of industrially-sponsored research
(e) an increase in the amount already allocated for computer facilities for teaching
(f) an increase in the unit of recourse for particular subjects. I shall be writing to give further details later in the year.

10. The same arrangements will be made for paying monthly instalments of recurrent grant in 1985–86 as in 1984–85.

CAPITAL IN RECURRENT ALLOCATIONS 11. In their replies to Circular Letter 16/83 of 1 November 1983, universities made clear that they valued the allocations of capital funds in recurrent grant for projects costing less than Elm, but would find them more useful if they could plan on a regular sum being available for the purpose. The Committee has therefore decided in future to allocate the greater part of the available funds with the rest of the recurrent grant. The amounts included are shown in Annex A. 12. The total (including the earmarked allocation) up to which universities may fund new capital projects from general income has been increased to 4 per cent. of recurrent grant, plus any part of the 3 per cent. allowance that was not used in any of the three preceding academic years. Expenditure in excess of this requires the prior agreement of the Committee. 13. The Committee has retained £6m from which to support specific projects costing less than £1m. Special allocations will in future be limited to large projects (normally costing not less than £200K) of exceptional urgency which universities could not reasonably be expected to finance from general income under the arrangements set out in the preceding paragraph. In general the Committee will be prepared to consider making special allocations to large projects only where the university is already committing a significant sum from general income to such projects. By "significant" the Committee means a sum equivalent to at least 2 per cent. of the university's annual recurrent grant for two years, including the year in which the special allocation is sought. Priority will be given to projects which show a saving in recurrent expenditure.

STUDENT NUMBERS 14. In its Strategy Advice the Committee described the financial difficulties which the universities were facing because the level of grant was not being maintained in real terms. The main reason for this was that the Government's pay factor had been less than the actual increases in salaries and wages, but there had also been cuts and unexpected new commitments. All the evidence since then is that, if anything, the universities' difficulties will increase. Although the Committee will review the position again when the Government has produced its Green Paper on the future development of higher education it considers that student numbers must continue to be restrained in line with the existing targets. However the relaxation applied to postgraduate student numbers which was announced in para 16 of Circular Letter 2/84 will continue; and universities' offers to admit additional undergraduates in 1984 and 1985 in response to Circular Letter 19/83, without additional grant, remain acceptable.

OTHER POINTS 15. The Committee is concerned about the decline in the provision of courses in building and related subjects at a time when the demand from industry for graduates in this area is increasing. It would not wish this decline to continue and invites universities to explore ways of securing the viability of such departments through a more comprehensive integration of the discipline with associated subjects such as architecture and building services as well as civil engineering. It further believes 126W that, given the importance of the construction industry in the national economy and its increasing demands for graduates, universities might also try to divert some of the resources now available to civil engineering into the broader field of building engineering.

Yours sincerely

SIR PETER SWINNERTON-DYER

ENCS: