Universities will be forced to cut jobs and hold back pay to meet budget cuts of £180 million for 2010-11 announced by the government.
The cuts were revealed yesterday in a letter to the Higher Education Funding Council for England (HEFCE) from John Denham, the universities and skills secretary.
The Department for Innovation, Universities & Skills (DIUS) is making the cuts as part of the government’s £5 billion public-spending efficiency drive set out in the budget. The department must save £400 million, but Denham wrote: “I am confident that we can find efficiency savings while protecting the quality of teaching and research.”
Sheila Gupta, chair of the Universities Personnel Association and corporate HR director at the University of Edinburgh, said universities had been expecting “a tight settlement” for a long time.“While the scale of the financial cuts reported may not have been known, there has been a strong sense that prudent management and careful budgetary forecasting would need to inform our business planning over the coming years,” she said.
Public funding for higher education will grow at a much reduced rate of 1.7 per cent between 2009-10 and 2010-11, compared with 3.5 per cent in 2008-09. Denham added: “I would understand if this means HEFCE needs to see some savings in the 2009-10 academic year.”
Employers were told to bear in mind the low retail prices index rate of minus 0.4 per cent for 2009-10 when deciding staff pay settlements.
According to Gupta, employers had been working on the principle that 2010-11 would be even more challenging than 2009-10. She said they had built these assumptions into long-term business and staff planning to ensure quality education.
“It will be important to have long-term people management strategies in place; we will still need to ensure we recruit, invest in and develop talented staff. We need to ensure excellent leadership and management skills, particularly in these difficult times. The need to maintain staff morale will be very important and so effective employee engagement will be crucial,” Gupta said.
Further education will also face efficiencies. In a separate letter to the Learning and Skills Council (LSC), Denham said the organisation should budget for cuts of £340million in 2010-11. While he said that some of this would be accounted for by DIUS directly, he added: “I expect the reduction in costs of intermediary bodies and administration to deliver no less than £100million without a direct impact on day-to-day learning.”
Denham said further education needed to raise quality. “I would like the LSC totake a robust approach to withdrawing funding from poorly performing providers and colleges,” he added.
The cuts contrast with the extra £122million the DIUS has earmarked to support training for young unemployed people.
The 2009 UPA annual conference will be held in Belfast from 12 - 15 May.