Vikki Goddard Posted by Vikki Goddard on 6th September, 2016

End of an Era for Austerity? Looking Ahead to the Autumn Statement

Vikki Goddard, Chief Operating Officer at the University of Salford, considers what a move away from austerity might mean for universities in the post-Brexit economy.

Given that university leaders have had more public policy news to digest and analyse in the last few months than we have had in the last few years, it has been at times difficult to distil the salient and material issues that will impact on university funding.

The period immediately following the Brexit vote saw more political turmoil in a week than the entire parliament before it; the tectonic plates of British politics shifted dramatically and at times violently and the public policy environment we face shifted with it.

There are a plethora of questions facing universities on how the divorce from the continent will impact on student recruitment (both EU and international), research activity, the ability to attract the best staff and how we will build and maintain partnerships with EU universities and institutions.

But perhaps one question left in the shadows by the sheer scale of the risks associated with Brexit, was Phillip Hammond’s signalling that the austerity drive for budget surplus could be slowed.

The next big moment in public policy for universities will be the Autumn Statement. This will not answer the majority of our Brexit concerns, but it will provide clarity on whether the drive for budget surplus through austerity really is over.

This poses the question as to whether there will be a windfall in public investment in the research and skills infrastructure that would provide some financial stability for universities in the absence of answers to the big Brexit questions?

The austerity drive has led to unsustainable decisions on student funding, the removal of vast amounts of grant money, and a general reduction in investment within the towns, cities and regions most universities are located in and would benefit from.

Whether the Autumn Statement does signal a real change is yet to be seen. Nevertheless, the principle in itself is important enough for it to be closely watched and examined. However, any sector-specific measures signalling more investment are likely to be a protection of research and other funding already coming in from the EU, rather than a real-terms increase on current levels.

Whilst not wanting to look a gift horse in the mouth, that would hardly represent a move from austerity but more a move to keep the economy afloat. Furthermore, given the government chose to push on with the HE White Paper, it is likely that any investment in skills is going to be focussed on apprenticeships and supporting degree level vocational education.

We may have had challenging times in HE, but the inflationary increases due in funding, linked to the TEF, do provide the opportunity for some relief against increasing salary and operating costs. But the sector that would be required to really get to grips with the new skills agenda, further education, has had a brutal funding regime in recent years and is more likely going to get the first share of any funding windfalls, beyond protecting EU grants.

The one area where there may be a positive move is funding into devolution and regional growth funds, which universities can access through a number of channels. A serious and properly funded devolution agenda, signalled in the Autumn Statement, could represent a significant opportunity for universities to engage much more deeply in the provision required for the modern skills economy which could further widen participation into Higher Education.

Overall, the Autumn Statement will set the narrative tone for Theresa May’s vision of what UK Plc will look like post-Brexit. The higher education sector is a major driving force within that, so any slackening of austerity is likely to be linked to how the government sees UK HE’s role in delivering the modern skills economy.

Phillip Hammond’s scope for movement is limited unless he wants to risk further unrest in his own party by completely dropping the drive for a government surplus, which would be quite radical.

As such, it is most likely that there will be a number of token gestures to attempt to bring about confidence that economic growth can be achieved post-Brexit, but with little in the way of the major boosts for HE that would get university boardrooms buzzing with excitement and relief!

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