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Call for clarity after university cuts

Construction Industry Council chief executive Graham Watts has praised the Government for its honesty in slashing university capital funding.

Mr Watts called on ministers to come clean on the scale of funding cuts anticipated in other areas as it reins in the national debt.

Business secretary Lord Mandelson revealed just before Christmas that higher education capital grants would be cut from £938 million in 2009/10 to £404m in 2010/11.

He wrote to Higher Education Funding Council for England chairman Tim Melville-Ross to announce the cut, which is due to money being brought forward and other recession-driven cuts.

Mr Watts told Construction News: “We are expecting all kinds of cuts in the current climate. I would much rather the Government made decisions and stuck with them than what happened with further education colleges where contractors were badly burnt.”

He added: “We need to have as much foresight in planning on each capital programme as possible.

We should be able to look two or three years ahead.”

The £534m fall in university capital grants was only slightly made up for elsewhere, as overall funding dropped £518m to £7.29bn for 2010/11.

Ominously for contractors, Lord Mandelson wrote to Mr Melville-Ross: “It is for you to take final decisions on how to allocate the revised figures. But we are agreed that you should aim to deliver the further savings in ways that minimise impact on teaching and students.

“I also wish to protect research funding. To achieve these goals, we have agreed to switch £84m from your capital baselines, so that the reductions to the teaching grant can be held to £51m.”

A spokesman for Universities UK, which represents the sector, said it was “too early to say” which projects could be hit by the funding cuts.

He added: “All cities and towns where there are universities will feel the effect of these cuts. We know universities have helped to sustain construction jobs. They have been big spenders and have invested very heavily in their local areas.”

Universities can also fund construction work by raising private capital or selling parts of their

estate, but the spokesman for Universities UK said the grants formed the “core money” for building work.

Universities UK president, professor Steve Smith, said: “The  higher education sector recognises the current pressures on public spending and is playing a key role in tackling many of the long-term challenges facing the economy.

“The confirmation that the higher education budget is going to face considerable cuts will put universities in England under severe pressure.”