Responding to Chancellor John Healey’s Budget, Vanessa Wilson, CEO of University Alliance, said:
“Today’s Budget included a series of measures designed to strengthen the UK’s innovation economy. These include new funding to help researchers turn discoveries into commercial ventures, support for university spinouts and entrepreneurs particularly for women founders, and a commitment to devolve innovation funding to mayoral areas so that investment decisions are made closer to the communities they serve. We welcome these measures and are once again pleased to see the government recognising the role universities play in driving growth, innovation and opportunity.
We are particularly encouraged by the government’s recognition that many of tomorrow’s successful businesses begin life as university research projects and spinouts. Alliance universities have a strong track record of working alongside industry to translate research into real-world impact, helping to create jobs, attract investment and grow regional economies.
The Budget also confirms a cap on student loan interest rates for the coming academic year, reducing the maximum rate graduates could face. This is a welcome intervention that will ease pressure on graduates.
However, the Budget does not address two of the biggest challenges facing higher education. Firstly, there was still no increase in maintenance support for students, despite parental income thresholds having been frozen for 12 years and despite the continued squeeze on living costs. Secondly, it contains no meaningful measures to improve the financial sustainability of universities. Direct government funding for university teaching has fallen by 60% since 2010/11 which has led to a £2 billion sector deficit on a full economic cost basis in 2024/25. This situation has led to chronic sector finance issues, made acute by inflation and recent measures like the International Student Levy.
The Prime Minister has spoken about making the UK a technical education superpower. The Chancellor has highlighted the importance of innovation, productivity and regional growth. Universities like ours are essential to all those objectives. They educate the workforce of the future, support local employers, undertake world-leading research and help create the businesses and support the industries that will power the UK economy in the years ahead.
If ministers want universities to do even more for the economy and for local communities, they must match these ambitions with long-term investment in both universities and the students they serve.”
