Cuts to the Student Opportunity Fund

As published in University Business, 11 March 2014

In January it was revealed that the Government was seeking to cut £200m from the Student Opportunity Fund, which helps disadvantaged students to pursue a university education. Leaked documents from the Department for Business, Innovation and Skills (BIS) warn that £570m needs to be saved this year and a further £860m after the 2015 election in order to reduce the economic deficit. These funding cuts have provoked widespread and vociferous opposition, led by the National Union of Students (NUS).

Run by the Higher Education Funding Council for England (HEFCE), the Student Opportunity Fund is open to all undergraduates and taught postgraduates and provides non-repayable grants of between £100 and £1,000 for disadvantaged students. Typically they use the grants to attend education conferences, seminars and events, to fund collaborative projects or for venue hire and small equipment purchases. Those in favour of the scheme have called it the last direct funding of universities to enhance social mobility, but the impact of its removal will be much more widely felt.

Student opportunity funding and social mobility

Without the Student Opportunity Fund, universities will face increasing pressure to support students from disadvantaged backgrounds using money from other sources – at the moment, this does not exist. Earlier this month, ministers announced that public funding for universities is to be reduced by a further £125m this year. Although HEFCE has been instructed to deliver savings “in ways that protect” certain subjects such as science, technology, engineering and maths, and “avoid harming efforts to get more poor pupils into higher education”, it is difficult to see how this is possible.

Higher education is widely believed to be a key factor in improving social mobility, and many graduates go on to support the UK’s economy in key growth sectors such as finance, media, legal services and business management. Significant cuts to parts of the BIS budget, which is supposed to assist with widening participation, will inevitably result in fewer people from disadvantaged backgrounds entering these professions.

This is a particular concern for universities that attract higher numbers of students from disadvantaged backgrounds; any funding cuts will have a negative impact on their ability to invest in outreach work as part of the drive to improve social mobility. These initiatives have become more prevalent in recent years since the introduction of increased tuition fees, and without them, universities will struggle to attract and retain talented students who would otherwise not be able to afford a university education.

Wider impact on skills, jobs and the economy

While a reduction in funding will have a direct impact on student numbers, it will also have a significant knock-on-effect for the wider economy. Universities will ultimately have to review their spending in all areas of the organisation, and this could result in potential redundancies, delays to necessary refurbishment or new-build campuses and a decrease in much-valued research and development projects.

A further impact of the cuts to higher education funding will be a reduction in the number of courses available to students. In a drive to bring down costs, universities will find it increasingly difficult to offer the range of courses they do now, decreasing the pool of skills that the next generation of students could potentially bring to the UK’s workforce.

Looking to the future

One of the most hard-felt implications of any cuts will be the decline of social mobility for future generations. It is vital that universities try and maintain their outreach initiatives in order to assist with the recruitment of students from socially-deprived backgrounds, and one way this may be achieved is through increased collaboration.

It is becoming increasingly common for universities to collaborate with other education institutions and the private sector to ‘plug’ budget cuts. Some universities may choose to merge but it is more likely that joint initiatives, where universities share staffing and resources, will become increasingly popular. Collaborative working in this way could provide one solution for universities to mitigate the harsh impact of these cuts on generations of students to come.

Whatever the solution may be, the crux of the matter is this: if we decrease the pool of talent taking up university education is UK ‘plc’ going to be able to compete in a highly competitive global economy? It is not in dispute that we need a dynamic, highly educated and skilled economy fit for the 21st century? My view is that fundamentally this is not a HE sector issue – this is an issue that affects us all; this is about our collective future. Our political leaders and the business world need to recognise this now.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.