Universities: Financial Sustainability

Gareth Snell Excerpts

Monday 11th February 2019 Commons Chamber

[Chris Skidmore]

Absolutely. If we began to return to a stage where universities are financed entirely by taxation it would not only put an increased burden of £12 billion on the taxpayer—an increase of about 2p to 3p on income tax rates—but mean that HE would have to compete with Government funding priorities on the NHS and welfare. Ultimately, we would return to student number caps and the situation we see in publicly funded universities in other countries where people struggle to find seats in lecture theatres. It is right that we have a sustainable financial system that protects students’ futures.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Government still put billions of pounds into the higher education sector through research grants. If the Minister is not going to bail out institutions that are struggling financially, will he indicate to the House what action he is taking to safeguard the taxpayer pound being spent by institutions on research?

[Chris Skidmore]

I entirely agree with the hon. Gentleman on the value of research and development in the HE sector. The Government are committed to spending 2.4% of GDP on R&D. Some university grants relate to Horizon 2020 and the Government have made an underwrite guarantee extension to protect all currently allocated grants. We want to work with the sector to look at how we can increase money for R&D. The return on investment is fantastic. In the space sector, for every pound spent on R&D £10 is returned, so I could not agree more that we do need to do more as a Government. We have not done more in the past to bring ourselves up to the OECD average. Universities will be at the front and centre of that.