UK Budget day: Is that it?

The oddest feature of the new government at Westminster has been the chasm between its pre-election promises on being ready to rule and the reality. Labour aced the election, turning a third of votes into two-thirds of seats in the most efficient way possible. Yet most people seem to think they have fluffed their early days in power.

At last month’s Labour Party conference, there was a sea of glum faces where there should have been euphoria. It seems no one is likely to write an upbeat bestseller on Keir Starmer’s first few weeks in power that resembles Blair’s 100 Days, the pacy book by the late Derek Draper. Higher education has been a particular victim of this stasis.

In recent weeks, the Office for Students has been busy warning of institutional insolvencies and Universities UK has been busy publicising its Blueprint for solving the funding crisis, while no one in power has been able to say even if tuition fees would be frozen, increased or redesigned. But let’s be fair, transitions are hard. Freshers take time to find their feet. This government will be judged over years, not weeks.

So Labour’s first budget for 14 years, delivered today by Rachel Reeves, was expected to begin revealing a fresh approach. Yet many of us were left waiting and wanting even after the chancellor had sat down.

Most notably, tuition fees did not merit a mention. It is still possible they will rise next year, as predicted this week by the BBC, not least because some official forecasts have assumed rises from 2025.

Higher fees would be good: underfunded universities are underperforming universities. But even if it were to happen, it now seems that much of any new money would go back to Whitehall via higher employer’s national insurance contributions. And we need better maintenance support as well as higher tuition fees, because underfunded students underperform too.

So it would have been good to hear the Treasury use the budget to tell universities and students what is happening and what they could expect. Pupils in Year 13 are on the cusp of submitting their Ucas forms – indeed, many have already done so. It is surely only fair that they know what fees they will face and what maintenance support they will receive when they start higher education in less than a year’s time.

We are regularly told such decisions are hard and so must be taken slowly. But that is questionable. In Tony Blair and Gordon Brown’s day, the tuition fee cap rose each year and no one blinked an eye. Similarly, when Jo Johnson increased fees by £250 in 2017, no one blinked an eye. And in Labour-run Wales, where fees have only just risen, no one has blinked an eye.

Even with a small inflation-linked rise, tuition fees would still be worth only two-thirds of what they were back in 2012. Yet in its manifesto, Labour hinted that it understood such challenges, saying: “The current higher education funding settlement does not work for the taxpayer, universities, staff or students.” So do we now have to wait for next year’s spending review to see an alternative?

Meanwhile, research funding is to be frozen. That is worse than small beer. The chancellor claims there is to be “no return to austerity”, but a freeze is exactly what the research sector got back in the austerity settlement of 2010. And a cash freeze is really a cut – for example, if it is measured against GDP, which is how international comparisons work.

In contrast to such meagre pickings, the Labour manifesto hinted at generous long-term settlements and the secretary of state for science, Peter Kyle, has been raising expectations high in the months since the election. So, again, we are left waiting and wanting. Here, there is at least an explicit commitment that next year’s spending review will set out a better path, so let’s hope it’s true.

It’s worth remembering that, before today, vice-chancellors were hoping for a new Tertiary Education Opportunity Fund to fund collaborations with further education; a new Research Security Fund to help universities respond quickly to emerging threats; a new funding scheme to boost philanthropy; and a new Transformation Fund “to enable and accelerate university-led change, and supporting sustainable and well-managed growth in international recruitment”.

I was hoping for measures to help universities help themselves – such as making membership of the Teachers’ Pensions Scheme voluntary for former polytechnics or improving the tax treatment of shared services. Will all this happen now at next year’s spending review, too?

We have to hope so because it will be hard for universities to make the meaningful contribution everyone expects of them, including in relation to the government’s stated five missions, if they are left forever in the waiting room. Even things that are left to coast stop turning in the end.

For now, I am left wondering who it was who said, “In the end, it is the hope that kills you.”

Nick Hillman is the director of the Higher Education Policy Institute.