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The chancellor’s budget dilemma: four ways universities can help

HM Treasury

​​In just under two weeks' time the Chancellor of the Exchequer, Philip Hammond, will stand at the despatch box to deliver his autumn budget – and we will know then whether he plans to spend or save his way out of the almost £20 billion hole in the public finances.

Britain is on track for the deficit – the gap between government spending and tax receipts – to reach £36 billion by 2021-22. According to the Institute for Fiscal Studies​, this is more than twice the initial official forecast of £17 billion. This bleak analysis adds to pressure on the chancellor as the economy deteriorates and uncertainty over the future of the UK economy post-Brexit persists. However, in our submission to the Treasury ahead of the budget, Universities UK suggests that universities hold the key to the UK being prepared for the many of the challenges ahead.

Ahead of 22 November, Universities UK will be demonstrating why a budget that will enable the country to increase productivity, boost social mobility and grow its way out of austerity makes sense. Here are four areas the chancellor should consider when he delivers the budget 2017.

  1. Make going to university more affordable and accessible for all

There are many benefits for individuals, for the economy and for society from increased numbers of graduates, and the country needs even more. There are shortages of skilled employees in some important industries and professions which the higher education sector can help address. Universities UK is calling on the chancellor to:

  • Boost flexible learning through more government support for adults to retrain or improve their skills, and provide better career advice for older learners
  • Communicate more clearly to explain the costs – but also the lifelong benefits – of getting a degree or gaining new skills
  • Invest new money to bring back maintenance grants aimed directly at those students who find it hardest to meet day-to-day living costs when they are studying
  1. Invest in more world-leading research in UK universities and provide the right conditions for university businesses to grow

Universities play a central role in carrying out world-leading research, in collaborating with cutting-edge businesses, and in nurturing innovative ideas generated by academic research. With the right support and conditions, universities can do more. Universities UK is calling on the chancellor to:

  • Move the UK further towards a target of R&D investment of 3% of GDP to ensure the UK doesn't lag behind international competitors
  • Increase funding to improve commercialisation and entrepreneurial skills in universities
  • Provide financial and business support – such as enhanced tax relief and more risk capital – to help great ideas turn into flourishing businesses
  1. Support universities to do more to address skills shortages nationwide

Universities make a significant contribution to regional prosperity, creating jobs, providing highly-skilled graduates for local employers, and attracting investment to all parts of the UK. With more support from government, universities can play an important leadership role in towns, cities and regions and ensure there are highly-skilled graduates wherever they are needed to help industries and businesses flourish. Universities UK is calling on the chancellor to:

  • Support local networks of universities and employers to identify skills gaps and be better at matching graduates with employers locally
  • Create stronger and clearer pathways through technical education by removing barriers to universities, further education colleges and schools working together
  • Provide funding and support to develop networks of universities which can help SMEs to thrive through training and advice
  1. Minimise turbulence and maximise opportunities for universities to contribute fully to a successful and competitive post-exit UK

The UK has one of the strongest – and most international – university systems in the world. To ensure that UK universities can continue to contribute fully to a globally successful UK there are a number of actions which need to be taken immediately to ensure stability and reduce uncertainty for universities. Universities UK is calling on the chancellor to:​

  • Guarantee UK participation in Horizon 2020 for the duration of the programme, including the period after the UK leaves the EU, and to commit to fund UK researchers as 'third country' participants in the event of full UK participation coming to an end
  • Confirm that the UK government will seek continued participation in Erasmus+ post-exit and strengthen the existing underwrite guarantee to cover all universities who have applied for Erasmus+ funding before we leave the EU
  • Prevent immediate decreases in the number of EU students applying to study in the UK by guaranteeing there will be no change to the tuition fee status and access to grants and loans in the academic year 2019-20
  • Outline the government's intended direction of travel for managing EU migration in the long term so universities can communicate effectively with prospective students


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