‘Levelling down’: axing London weighting bad for UK HE, says report

London Higher, which represents 40 London institutions, said the decision to cut London weighting from OfS Strategic Priorities Grants would create a £64-million shortfall in the capital

The capital’s universities cannot afford to lose teaching grants with London weighting, a mission group of higher education institutions (HEIs) has warned.

A report by Frontier Economics, published today by London Higher, has accused the government of “levelling down, not levelling up” after initiating a review into the additional allowance paid to HEIs in Greater London.

The group that represents 40 HEIs in the capital said the decision would create a shortfall of £64 million across the city.

In January, ministers asked the Office for Students (OfS) to review the Strategic Priorities Grant, formerly known as the Teaching Grant, and axe London weighting from all its grants.

In a letter sent to the universities regulator, education secretary Gavin Williamson said: “The reduction of London weighting will enable the OfS to invest in other priorities such as high-cost subject funding, which is offered to providers in all regions of England, supporting the levelling-up agenda.”

The OfS consultation closes on 6 May, with final funding allocations due in early July. London Higher hopes to reverse the cuts, which would come “at short notice” and give providers few options other than to cut staff headcount and pay, outreach services or teaching, it said.

The London Higher report warns a cut would most impact teaching-intensive universities that serve disadvantaged and black communities in London and commuter students from the capital’s environs. One vice-chancellor said the decision could damage social mobility for the least advantaged students in the city.

Those same universities are also key training institutions for key workers, such as teachers and healthcare workers, the report noted, warning that cuts could hit the critical flow of future NHS staff. London universities educate 43% of medicine and dentistry students and 18% of healthcare students.

I’m most concerned about the knock-on impact on widening participation goals, and that they could be significantly compromised
Prof Amanda Broderick, University of East London

One anonymous senior leader of a London HEI said the institution had “reached the limits of what we can borrow” and would have to “cut costs”. London Higher’s chief executive Dr Diana Beech said these decisions would “level down London, not level up the regions”. Prof Frances Corner, warden of Goldsmiths, accused the government of playing “reckless postcode politics”.

London Higher points to a May 2020 OfS board meeting as evidence of its concerns.

The OfS board concluded that the cost of providing HE outside of London “are not comparable with those in London” and that the current London weighting “falls significantly short of the additional costs that London providers face”. A 2019 KPMG report, commissioned by the Department for Education, concluded that HE provision in London is 14% more costly than the England average.

London weighting costs the OfS approximately £60 million to £70 million per annum.

The London Higher report argues these top-up funds are necessary because costs are higher in London, and all but the very biggest providers would financially struggle with their removal.

The umbrella group says analysis of financial records provided to the Higher Education Statistics Agency (Hesa) suggests that only four universities in Greater London could absorb the grant reduction. According to the report’s figures, three universities would become loss-making, and the deficits of seven made worse.

As a specialist provider, our ability to support and develop the next generation of healthcare professionals and scientists will be severely hampered by this change, which will result in a recurrent annual loss of £1.7 million
– Prof Jenny Higham, St. George’s, University of London

When it last year decided in favour of retaining London weighting, the OfS concluded the benefits of operating in London “are not shared uniformly”. London Higher backed this conclusion, arguing that although Greater London accounts for around 30% of the total international student intake for England, just five London universities account for half of that share.

Given the recent decision by the OfS to support London weighting, Dr Beech questioned if the new OfS chair, Conservative peer James Wharton, would support the organisation’s independent conclusions in the face of ministerial pressure. “Could this change the OfS’s approach to this issue?” Beech told journalists. “Are [the OfS] likely to soften towards the government, or would they maintain the arguments from last year?”

“We urge government to think again about re-allocating this funding at a time when we need a strong capital to lead our post-Covid recovery and uphold the UK’s status as a quality global study destination of choice,” said Beech.

During a briefing with journalists, Prof Amanda Broderick, vice-chancellor of the University of East London and London Higher’s chair-elect, said: “I’m most concerned about the knock-on impact on widening participation goals, and that they could be significantly compromised. When we consider that child poverty in London is the highest in any English region, or indeed in any UK country, without London’s positive contribution to widening participation, it’s likely that we will have lower social mobility across the UK as a whole.”

Prof Broderick noted the impact other grant cuts to high-cost, non-STEM subjects, like those in the creative industries, would have on universities. “I think we need to make both the economic and also the social case for support of the creative industries,” she said. “If we look at the list of strategically important subjects, there is a real narrative that in the exclusion of creative industries from being strategically important, it relates to the government’s perception [of] low quality [courses].”

Prof Jane Harrington, vice-chancellor of Greenwich University, said: “Many of our students come from the most deprived boroughs of London, more than 52% are from BAME communities, over 70% live at home as they study, and over 56% are the first in their family to go a university. The significant reduction to our budget means that we will have less money to continue to support our students and future graduates at a time when they need it most.”

Nick Beech, the vice-chancellor of Middlesex University, called on the DfE “for more precision, for more analysis… rather than the very broad-brush approach that has been taken so far”.

Prof Jenny Higham, principal of St. George’s, University of London said: “As a specialist provider, our ability to support and develop the next generation of healthcare professionals and scientists will be severely hampered by this change, which will result in a recurrent annual loss of £1.7 million.

“We, like many specialist institutions, operate on small margins and this deficit will have a massive impact on our small surplus, reducing the investment we can make in our essential education facilities.”

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