Transcript blogs.lib.sussex.ac.uk

Balancing the Books
What did the budget do for us?
SAF-UIS
Sally Faith, University of Sussex
Sally Faith
26 June 2009
Who’s in charge?
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The Boss: Rt Hon David Lammy MP
Minister of State for Higher Education and
Intellectual Property
The Boss’s Boss: Rt Hon Lord Mandelson,
First Secretary of State for Business,
Innovation and Skills and Lord President of
the Council
Where do we stand financially?
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Financially, as a nation, things are not that great right
now! http://www.hmtreasury.gov.uk/bud_bud09_index.htm
The UK has a ‘borrowing requirement’ of £175bn
6.3% of national income (or £90bn p.a.) is needed just
to cover the cost of the recession
Of this, £140bn will need to be found even if the
economy gets better. How…?
£30bn has been earmarked in the recent 2 budgets to
help kick-start the economy
How does the future look?
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Current spending expected to show less than 1% growth
in real terms: the lowest for a long time!
Investment spending expected to fall substantially
Thus total spending to be cut by 0.1% p.a. in real terms
Where do we stand against the
others?
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In the euro context GDP was at @3.5% on Q1 ’06 – in
Q4 ’08 it stood @-6%
UK projected to hit -4% in ’09 & -0.4% in ’10 (France 3% & 0.4%. Germany - -5.6% & -1%)
Only UK & Sweden (in Eurozone) have invested more in
Government Support - more than £50m (source IMF)
Sovereign Financing Requirement? Better than many!
Lots more information can be found on the World Bank
& IMF web sites.
(source Eurostat)
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(source IMF)
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So, all this borrowing…how will we
pay it all back?
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Government intends to raise £90bn extra per year from
next year
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10% from tax increases
40% from public sector spending
50% from … to be announced after the next election!
Meanwhile, capital investment programme cut this year
How will this play out for HE?
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Extra £5bn vfm saving required in 2011 which increases
the CSR savings (identified in 2007) needed to £35bn.
DIUS were asked to find £1.94bn out of £23.2bn savings
(not yet clear how this equates to BIS) incl
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£118m increased efficiency & decreased admin
£116m saving from Research Councils (to be reinvested!)
£50m improved procurement
£400m improved efficiency in FE & HE
A further £9bn on top pf the £35bn required in 2013/14.
HE’s share to be confirmed!
And there’s more…
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Caps to remain in place for:
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Student Numbers
ELQs
Student grants & loans
However…the commitment to increase the science
budget by 6% is being upheld.
Can it get any worse?!
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Other factors that could impact on the pressures include:
 Pay settlements and related disputes
 Cost of pensions
 Low returns on investments & reductions in other
income areas.
 No substantive outcome from the fees review
 Quicker economic recovery outside of the UK
What changes can we expect in HE
as a result of all this?
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Potential concern over the capacity for all institutions to
survive in current form
Jam-jar funding
Pressure on levels of quality
Pressure on administrative & central funding that may
have long term implications for the academic workload
etc.
To conclude
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How long will this go on?
What are we going to do about it?