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The BBC's Mike Baker reports
"England's top universities now struggle to compete with overseas rivals"
 real 28k

Thursday, 2 March, 2000, 11:46 GMT
Below inflation rise for universities
Successful universities will be receiving larger increases
Universities in England are to receive a below-inflation increase in funding for next year.

Funding for higher education in England in 2000-2001 has been set at 4.5bn, which the head of the Higher Education Funding Council for England, Sir Brian Fender, said represented an average 1% cut in real terms.

The overall budget increase of only 1.5% could leave universities struggling to recruit and retain academic staff, said Sir Brian Fender.

Universities: largest increases
Bath 7.7%
Aston 7.2%
Essex 6.9%
Bournemouth 6.2%
Teesside 6.1%
The funding settlement will leave over half the universities in England with an increase lower than inflation - compared to a third last year - said lecturers' union leader, David Triesman.

However many individual universities will receive above-inflation increases, as research funding - almost a third of the budget - is awarded to those universities which "have demonstrated strength in research".

Universities: cuts and smallest increases
Northumbria 0.8%
Keele 0.6%
London School of Economics 0.5%
Sussex 0.5%
Thames Valley
For instance, the University of Bath will receive a 7.7% increase, Aston University will receive a 7.2% increase and Essex will receive a 6.9% increase.

The biggest single loser in year-on-year income will be Thames Valley University, with a 11.3% reduction. And among those with below inflation increases, the London School of Economics and the University of Sussex will only receive 0.5%.

In addition to this funding from central government, many universities draw incomes from other research contracts.

But the funding council settlement is the largest single contribution to universities - representing about a third of the total income received by the higher education sector.

The government says that directing extra funds towards the best performing universities encourages and rewards higher standards.

A spokesman also said that over the full course of the parliament, there would be an increase of 11% in spending on higher education - compared to a fall of 36% per student funding between 1989-1997.

Expanding access to higher education remained a priority, said Sir Brian Fender, and within the funding package, 60m is designated for extra places and 20m will support students facing financial hardship and those from under-represented groups.

Universities will be expected to create an extra 37,000 places next year.

"The basic recurrent funding position is less satisfactory. An average cash increase of only 1.5%, following on cuts in the 1990s, will pose difficulties for institutions, particularly in recruiting and rewarding staff," he said.

The budget breakdown for 2000- 2001 is:
  • 2,923m core funding for teaching
  • 60m for 37,000 additional student places
  • 25m to widen participation by under-represented groups
  • 867m for research
  • 483m special funding

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