University spending is vanishing, but that doesn't meant this is another LSC debacle

This is bound to sound harsh to the architects worrying if their laboratory will ever move from screen to site. But this is not the LSC in a mortar board. The money was never promised; and it comes after a decade-long boom

After the fiasco that engulfed the programme to renew Britain’s further education colleges, it’s the turn of those firms working on university projects to hold their heads in their hands. The Higher Education Funding Council for England (HEFCE) has had its government grant for capital projects halved, and is being forced to impose a 15% cut on the money it passes on for schemes, which is forcing academia to cut projects. The University of Worcester’s £25m creative arts centre and a £12m science block at the University of Hertfordshire are two of the latest schemes to be hit. What’s made matters worse is that two-thirds of the money universities spend on capital works (£3bn in the current academic year) is raised by other means, such as loans and endowments, which have also dried up.

This couldn’t have happened at a worse time. The recession has spurred ever more people to apply to university; this autumn there could be 300,000 applicants without places, so one in four could be turned down. This is embarrassing for a government that has organised its policy for tertiary education around the aim of getting half of all 18 year olds into university (the figure for 2007/08 was 43%). That has always been a questionable aspiration – will half of the jobs on offer in the economy really require a degree? And will half of all students really benefit from gaining one? Furthermore, the policy was never properly costed. Now, it seems, the chickens are coming home to roost.

That hasn’t stopped Peter Mandelson putting a positive gloss on the proposed £950m of funding cuts, including teaching, over the next three years. He says it should be seen as a chance for institutions to rethink how they are organised. And in this respect he’s right. That’s bound to sound harsh to the dozens of architects and other consultants worrying if their library or laboratory will ever move from screen to site. But this is not the LSC in a mortar board. The money was never promised; and it comes after a decade of boom rather than underinvestment. And although growth will be stymied, the sector won’t be stagnant. For a start, all universities have to cut their carbon footprints as a prerequisite for grants. Universities, more than any other clients, have a nose for building when prices are lowest – and will be searching for innovative ways of funding essential projects. Cambridge university, which is planning the biggest expansion in its 800-year history on a site north-west of the city, is considering issuing bonds. Although this will not be an option for all universities, it illustrates the financial gymnastics they and their advisers – including construction consultants – will need to perform.

And for all those who can’t get a university place, you could take the advice of David Lammy, the skills minister, and consider an apprenticeship. If only. The decline of that form of education really is something to cry about.

Another no brainer for the LSC

Meanwhile, the outlook for further education colleges goes from bad to worse. This week, it emerged that the allocation of £200m of government funds has been held up (page 12). Although nobody would advocate that the LSC rush into commitments to individual colleges (not after last time), it seems ludicrous that it would hold onto this money until after the election, when it’s likely to be snatched away by whoever’s in power. With no guarantee that any more money will become available, even in five years’ time, the body would do well to score a consolation goal and hand out the cash as soon – and as widely – as possible. It might not be the glitzy redevelopments the colleges were hoping for, but it’s a quick win for a sector desperate for good news.