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Universities set for 11% budget swell – but cost of tuition fee grant policy set to rise

Cardiff Metropolitan University

Cardiff Metropolitan University

By Graham Henry

Universities are set to see their budgets swell by more than 11% next year thanks to rising income from student fees – despite seeing direct public funding fall by a quarter.

Budgets plans released by the Higher Education Funding Council for Wales (Hefcw) revealed it has allocated £385m to Welsh universities for 2014-2015, with total income for universities and colleges amounting to around £407m.

But the amount paid out by the Welsh Government’s tuition fee subsidy policy is set to rise by more than £60m next year – from last year’s estimate of £167m to £228m this year – partly fuelling the £40m rise in budgets.

Hefcw said it would pay out an estimated £150m next year to universities through the student fee subsidy policy for Welsh and EU-domiciled students – up from £117m. The amount it pays for Welsh students studying elsewhere in the UK is also set to go up from £50m to £78m.

Under the policy, Hefcw covers the rise in costs for students ordinarily resident in Wales by paying the Student Loans Company (SLC) – which helps fund students through university – the balance. In turn, the SLC covers the cost to the institution direct.

Fees paid by eligible students over and above the previous annual fee rate of £3,685 (adjusted for inflation) – the maximum universities can now charge is £9,000 – go direct to universities themselves.

The HE sector’s income boost comes despite the amount they get from publicly-funded direct grants falling by a quarter.

Cardiff Metropolitan is projected to see the biggest rise in its funding, at just under 33%, with Glyndwr set to see a 21% rise and Swansea and the University of Wales Trinity St David both set to see rises of nearly 13%. Cardiff University is set to see the lowest rise, at just over £6.5m (6%), compared to last year.

Dr David Blaney, chief executive of Hefcw, said: “As the single largest funder of research at universities in Wales, we have given strategic priority to maintaining our research funding for the next academic year.

“Not only will this help the competitiveness of HE institutions in the year that they are assessed for their research quality, but will also contribute to a strong knowledge base. This in turn strengthens the economy, to which Welsh universities already contribute more than £3bn every year.

“We are also providing significant funds to make sure part-time courses are attractive and accessible to students, while also recognising that certain full-time undergraduate courses require additional support from us.”

Dr Blaney said with 60% of Hefcw’s budget following students from Wales to universities across the UK, the organisation had to reduce direct funding to accommodate the rise.

But he insisted it had made the “best strategic decisions” for higher education in Wales within existing resources.

He said: “Within that context, universities and colleges will continue to show how they address these and other priorities, such as widening access, through their fee plans. If full-time undergraduate recruitment to Welsh institutions continues to be buoyant, we can presume income to universities from the combination of higher fees and Hefcw grant will increase.

“Students from Wales and beyond should be confident that they will continue to receive the quality student experience for which universities in Wales are renowned, given the ongoing commitment to public investment in higher education.

Dr Philip Dixon, director of education union ATL Cymru, said: “Students in Wales will be pleased with the continued support that they receive in paying their fees.

“ATL praised this flagship policy at the recent TUC conference as one of the benefits brought by devolution. Recent statistics seemed to show that some of our universities were slipping in comparative terms so the targeting of funds on research is also vitally important.

“In a highly competitive market our universities have to compete with the best in the UK and the world.” (Wales Online)

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