Autumn statement, World Cup and global events, and industrial action28 November 2022
It’s tempting to begin by saying another month, another government, but this is no occasion for levity. The advent of the Sunak-Hunt administration has brought some stability to Westminster and, much more importantly, to the economy, although given the fundamental issues caused by the consequences of the pandemic, the Russian invasion of Ukraine and other destabilising geopolitical factors, some level of stability is the least we can hope for given the near-catastrophic consequences of the September ‘mini-budget’ debacle. The Chancellor’s Autumn Statement confirmed that in order to control the national debt over time, we will be experiencing higher taxes and constraints on public spending just as the economy contracts, rather than the counter-cyclical fiscal expansion that governments would classically favour during periods of recession. That is one oddity; another is that while universities often do well in recessions because demand for higher education increases when fewer jobs are available, this looks like a recession accompanied by labour shortages. Everybody is acutely aware of high inflation and as I said last month, we are supporting our staff and students in respect of the cost of living crisis and will continue to do so. That said, there is no disguising that this is a difficult period for the University as it is for the country and for individuals.
For a range of reasons, which are being addressed, this year we did not recruit as many home and international postgraduate students as we had set out to do, and fell a little short in international undergraduate recruitment too. The after-effects of covid washed through into a slight over-recruitment of home undergraduates, but it will be necessary to rebalance student numbers over the next three years or so in order to avoid a net negative effect on our financial and academic sustainability. That is in hand, but it will not be helped by the recent heavily trailed indications from the Home Office that severe reductions in the numbers of international students and their dependents will be required if net migration is to be brought down significantly from the record 504,000 that was announced towards the end of the month. This is a rehash of the Suella Braverman comments that led to her resignation or ousting from the dying Truss government, and the arguments against any such imposed reduction remain just as strong. The contribution of international students to the balance of trade and to the UK economy is enormous at £30bn per year. At a time when the UK is struggling to achieve growth it makes no sense to pursue this policy. Surveys confirm that the public does not see international students as migrants, which makes sense because they are not. In short, they come here, they study and they go home. The data show that very few international students overstay their visas and illegal migration via this route is rare. Where there are issues, we must acknowledge them and work with the relevant agencies to resolve them. Matters such as shortages of accommodation or insufficient capacity to cope with dependents must also be addressed, but sector organisations such as the Russell Group and Universities UK will robustly oppose damaging efforts to redress the migration balance by restricting flows of international students.
These are matters reserved for the UK government, but the Welsh government has issues to address too. The unit of resource — the amount of money available to fund each home undergraduate — has been declining steadily as the tuition fee has remained fixed while costs have risen for almost a decade. Thus far we have been able to manage, but that decline is now becoming more of a precipitous fall as inflation skyrockets. Money must be found to supplement the cost of teaching, which is rising rapidly along with other costs. It is important to act now, before we start to get into real difficulties, if the quality and breadth of Welsh higher education is to be maintained, let alone strengthened. It will become increasingly difficult to offer places to applicants from Wales and we will struggle to maintain the quality they expect and deserve unless there is a serious discussion about how the sector is to be funded in an uncertain world. The first step would be to create a forum for that discussion to take place.
The Autumn Statement wasn’t all bad news for universities. Jeremy Hunt confirmed that the £20bn per year for research promised in the recent Comprehensive Spending Review would be maintained until the end of this parliament, rising indicatively to £25bn by 2027, although that will be a decision for the next government. Certainty of funding over seven years is one of the advantages of association to Horizon Europe, but the Northern Ireland protocol continues to be a block on that. However, the government has clearly decided that it is time to start deploying some of the funds reserved for association over the full period (given that we have already missed the initial years) with the release of £484m of research funding explicitly designed as a substitute for the lost funding opportunities. It is, of course, still possible to make applications to the ERC and be funded through UK money, the Treasury guarantee having been extended until the end of the year, which is also positive. The newer fund is, though, a recognition that a transition to a period where association to Horizon Europe is impossible may be on the cards.
The other positive aspect of the Autumn Statement for universities was the refocussing of investment zones on university towns. The idea is to catalyse eight knowledge-intensive growth clusters, clearly signalling the government’s commitment to research, innovation and high-level skills. If these clusters are to be England-only we will need to await Welsh government policy, but even symbolically this is an important commitment. The jarring clash with any policy to restrict international student visas, which could have a seriously detrimental effect on our research effort, ought to work in our favour.
Towards the end of the month I took part in a meeting of the GW4 Council, which consists of the Vice-Chancellors of each of the four member universities, Cardiff, Bath, Bristol and Exeter, plus the Pro Vice-Chancellor for Research and Innovation of the university holding the chair, in this case Bath. It is good to see the partnership thriving, so please do continue to make use of the Building Communities funding which participant PIs credit with giving them the opportunity to build partnerships and develop their potential. The programme is designed to be inclusive across the four areas of creative and sociocultural, health and wellbeing, digital, and net zero. The partnership is all about collaboration and scale; it was founded on the realisation that regional co-operation can leverage opportunities that would not otherwise be available, and that the research capacity of the four universities together was still not as great as that of UCL alone. Things have moved on since then, and indeed we will be celebrating the tenth anniversary of GW4 at an event at the ICC in Newport next May.
Finally, I want to mention the World Cup in Qatar, though not from a football point of view, on which matter I am very far from having any expertise whatever. You may know that our own Professor Laura McAllister captained the Welsh football team and played in every match between 1994 and 2001. A former chair of Sports Wales, she is in Qatar representing Lleisiau Cymru (Welsh Voices) and as an ambassador for football and for Cymru more generally. You would doubtless recognise Laura from her peerless chairing of our all-staff webinars, and would have found her all over the papers recently because she was initially stopped from entering the stadium for the first match of the national team for wearing an LGBTQ+ themed rainbow hat. Being Laura, she got the hat in anyway and wore it for the next match, but it highlighted the dilemma facing many in the context of this tournament. It was remarkable to see the protest of the Iran team, who could face real consequences for their refusal to sing the national anthem on their first outing, a signal that was not lost on the Iranian authorities who are facing widespread and extremely courageous open opposition to their suppression of rights and violence against women in Iran. Many Cardiff students and staff are horrified at the events there, which include violence against students and staff in the country’s universities. This is abhorrent behaviour which, very sadly, we are all too familiar with from our own continent. Putin’s war of aggression in Ukraine continues to plumb new depths, and we continue to offer all the support we can to those affected.
Finally, and with apologies for a rather downbeat email this month, we are, as you know, experiencing a renewed period of industrial action which affects staff and students alike. I feel strongly that it is important to resolve these disputes before they have a chance to escalate further, and hope that there will be productive discussions between the respective sides as soon as possible. Collective bargaining means that the employers have to operate within a mandate dictated by the capacity of every member to deliver the outcome of negotiations, which is a limiting factor. Nevertheless, I shall be urging an outcome that is fair and affordable and meets the needs of staff now, recognising that, as I said earlier in this email, everybody is facing a set of economic circumstances more difficult than could have been foreseen even six months ago.
With best wishes