Our recurrent teaching and research grant for the academic year 2010/11 has been cut by £2.7m. For the following academic year, 2011/12, this is reduced by a further £3.6m. This represents a cut of £6.3m in absolute terms from the 2010/11 starting point. While these cuts are broadly in line with our predictions, they clearly represent a significant reduction in our funding.
Our funding for capital projects has also been reduced significantly: we expect to receive £5.7m for the financial year 2011/12, and then £5.1m for the financial year 2012/13.
It is also important to note that in confirming our reduced funding, HEFCE has had to assume the level of funding it will continue to receive from Government, and that it is therefore not inconceivable that further in-year cuts could be presented, over and above the cuts I have outlined.
Universities, unlike much of the public sector, are fortunate that there will be an increase in income from 2012 from increased home undergraduate fees. However, it is very likely that this increase will be largely, if not completely, offset by the existing and any future cuts.
These cuts should, of course, come as no surprise, as we have been predicting this situation for a considerable time and, nationally, the message concerning the sector’s financial situation has been repeated clearly.
It is vitally important, therefore, that we continue with the measures we have in place to control our costs while still investing in those capital projects which are of strategic importance.
As I have said previously, these are very challenging times. However, through responsible and rigorous financial management and our continued progress in controlling our costs, we will be best placed to respond to future challenges while safeguarding our longer term position.