HC Deb 27 February 2003 vol 400 cc674-5W
Mr. Gibb

To ask the Secretary of State for Education and Skills how many universities and colleges in the English and Welsh higher education sector have operating deficits; and if he will make a statement. [98504]

Mr. Charles Clarke

Information about higher education institutions in Wales is for the Welsh Assembly to provide. The Higher Education Funding Council for England published 'Outcomes of 2002 financial forecasts and annual operating statements' in January 2003. This report is based on information provided by higher education institutions in July 2002. The forecasts were based on assumptions reflecting the prevailing general economic climate and the funding announcements made at the time and so do not take account of the Spending Review settlement for 2003–04 to 2005–06. Projected levels of surplus are significantly affected by exceptional items, such as gains or losses on property transactions.

The forecast income and expenditure position for the sector as a whole is set out in Table 1 of the report, which is shown.

Table 1: Actual and forecast income and expenditure
£ million
Actual 1999–2000 Actual 2000–01 Forecast 2001–02 Forecast 2002–03 Forecast 2003–04 Forecast 2004–05 Forecast 2005–06
Surplus as % of total income 1.19 0.40 0.10 (0.09) 1.10 0.81 0.67
Historical cost surplus as % of total income 1.95 1.25 0.92 0.51 2.11 1.37 1.02
Exceptional items — 77 26 3 101 41 6

The only year where there is a forecast deficit for the sector as a whole is 2002–03 when the deficit is estimated at £10 million or 0.9 per cent. of the total budget of over £12 billion.

The number of universities and colleges forecasting deficits is shown in table 2 of the report.

Table 2: Actual and forecast surpluses and deficits
Number of HEIs forecasting operating deficits Number of HEIs forecasting historical cost deficits
2000–01 47 (35%) 35 (26%)
2001–02 55 (41%) 35(26%)
2002–03 60 (45%) 35 (26%)
2003–04 44 (33%) 24 (18%)
2004–05 39 (29%) 21 (16%)
1005–06 33 (25%) 22 (16%)

As a result of the latest Spending Review announcements, Government spending on higher education will rise by more than 6 per cent. a year above inflation over the next three years.