Chancellor's Autumn Statement - Issue of the Week - 3rd December, 2012

In his Autumn Statement this week the Chancellor will no doubt update and revise spending plans to account for the continued sluggish pace of economic growth. We're likely to see some new investment strategies announced alongside revisions to forecasts and analysis from the Office of Budget Responsibility. We could also see the first hints of what might be expected in a possible future Comprehensive Spending Review.

For those of us in HE the statement will be an important indicator of how valuable the Government considers research to driving economic growth.

One key question will be whether the Chancellor will take the opportunity to outline where he might invest the windfall of the 4G sale—expected to be about £ 4bn. With UK research punching above its weight internationally in terms of impact and return to the economy, but underfunded by OECD standards, this is provides an opportunity to invest in work that creates future innovations just as fruitful as 4G.

The second question is what to do with the Heseltine Review. Central to the review is the role of the Local Enterprise Partnerships (LEPs), which whilst doing some good work, have little power or resource. As large employers, incubators of enterprise, innovation and knowledge transfer many universities play a leading role in their LEP. But the long-term success of LEPs to stimulate and drive the local economy will depend to a large extent on their ability to lever funding and develop partnerships and change—for this we hope for answers on Wednesday.

Student numbers

As the Chancellor prepares his statement on Wednesday BIS Ministers and Officials will be busy thrashing out the detail of the HEFCE annual grant letter. As discussed last week, questions over student number controls will be central to the final detail of the HEFCE letter. Whilst we are expecting the Government to reiterate its commitments to removing caps on ABB recruitment, it may be worth considering something altogether bolder.

Last week's worse than expected provisional UCAS figures for 2013 entry, whilst too early to provoke panic, could prompt the Government to be more radical on its number controls policy. This summer saw universities recruit a smaller than expected cohort of AAB students, with the fortuitous consequence that the Treasury's exposure to loan subsidy costs was reduced. To counteract the potential for a drop in applications this year BIS could take up the opportunity this presents to enable even greater choice for university applicants by moving quickly towards uncapping BBB recruitment this year rather than the planned ABB. This would enable the most in-demand universities to stop turning away so many well-qualified students.

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