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Capital funding for higher education will be slashed from next year with support diverted from certain subjects including journalism and media studies towards lab-based courses in the latest blow to England’s cash-strapped universities.
Education secretary Bridget Phillipson told the sector regulator on Monday that capital spending would be almost halved in 2025-26 to £84mn from a multiyear settlement equivalent to an annual allocation of £150mn.
The grant to help deliver high-cost subjects and access initiatives will be cut from £1.46bn to £1.35bn, Phillipson told the Office for Students.
An “extremely challenging fiscal” situation required compromises, Phillipson said, as she set out plans to target top-up funding for expensive courses in strategic sectors by removing support for media studies, journalism, publishing and information services.
Franchised providers will also be prevented from accessing student premiums under the plans.
The announcement comes less than a fortnight after the OFS warned that financial pressures had forced many providers to scale back planned capital investments, leaving some buildings at risk of becoming “unfit for purpose”.
Universities have warned that reforms to the graduate visa announced by the government last week will further exacerbate the financial crisis in higher education, as a growing number of providers cut courses and roll out redundancy programmes.
Tim Bradshaw, chief executive of the Russell Group of elite research universities, said the cuts were “another blow” to a sector already facing “stark financial challenges”.
“Universities across the country are making efficiencies, but many are already facing difficult decisions to protect their long-term futures,” he said, adding that immigration reforms would make it more difficult to attract high fee-paying international students.
“A further squeeze on funding will undermine their ability to support the government’s efforts to deliver the industrial strategy, improve public services and achieve economic growth,” he added.
Vivienne Stern, chief executive of Universities UK, which represents the sector, said universities were already under “extraordinary financial pressure” in the face of declining international recruitment and rising employer national insurance costs.
“We need [the] government to work with us to stabilise the ship and put it back on an even keel. That is the opposite of what happened today,” she added.
