Universities will be lucky to avoid being ¡°completely hit over the head¡± in the UK government¡¯s upcoming spending review as ministers look set to prioritise plans for growth ¨C which could eat into core research funding ¨C and save higher education reform for a later date.

The exercise, which concludes on 11 June and will set departmental budgets for the next three years, had been seen as the moment policymakers could reveal a new English higher education funding regime, with institutions hopeful of increased investment to combat worsening financial pressures.

But analysts suggest there is now little chance of this happening, with the Department for Education (DfE) instead appearing to want to channel its limited funding into support for schools and further education.?A coming White Paper on skills, due this summer, is now seen as a more likely moment when any significant changes will be revealed.

Rather than increase university funding, the DfE recently cut the Office for Students¡¯ strategic priorities grant by ?100 million, impacting support for high-cost subjects and initiatives such as widening participation.

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This capped a brutal few months for the sector, which also saw a 6 per cent levy on international fees proposed, funding for higher-level apprenticeships cut?and increases in employer national insurance payments.

Things are unlikely to improve in an ¡°incredibly tough spending review¡± said Paul Kett,?a former director general for skills at the DfE, which will see the government make significant cuts across the board.

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¡°I think there¡¯s a bit of a question whether or not they do trail the higher education paper that they¡¯ve promised for the summer in the spending review, or they leave that separate,¡± said Kett, now a senior adviser for education and skills at PwC.

He said the decision on whether the government will uplift fees once more, and commit to doing this every year, seems more likely to come in the paper, when the government can also lay out what it wants from universities in return.

Last year, education minister Bridget Phillipson??for universities, and analysts expect any funding settlement will be contingent on the sector proving its support for these.?

¡°The best outcome [universities] can hope for is not being completely hit over the head,¡± said Jonathan Simons, head of the education practice at consultancy Public First.?

¡°The biggest issue that universities will have is around the research budget,¡± he added, predicting that some of the industrial strategy priorities may be funded out of the core research and development (R&D) budget, leaving research councils with less money to allocate.?

A continuation of this year¡¯s flat cash settlement for UK Research and Innovation (UKRI) could also create ¡°further pressure on the amount and quality of research that universities can afford to do¡±, Kett agreed.

However, Andy Westwood, professor of public policy, government and business at the University of Manchester and a former Labour adviser, believed the government¡¯s priorities may also offer opportunities for universities.?

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¡°Even though it doesn¡¯t come through the research councils or through QR [quality-related funding], there¡¯s a lot of money being spent on R&D, whether that¡¯s in health, defence [or] in support of the industrial strategy,¡± he said.?

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¡°I think it¡¯s really important for universities to think not just in terms of that core research budget, but what other opportunities are made available through plans for spending the rest of that investment,¡± including local growth plans, the new defence innovation body being created and the Oxford-Cambridge Growth Corridor.?

This, he continued, gets to the heart of how universities can convince the Labour government of the importance of their role.?

¡°Over many years the sector has become used to talking in broad terms about how universities drive growth, whether it¡¯s skills in the workforce and the need for more graduates...or blue skies research and how valuable that is to growth and productivity.

¡°The challenge is that this government is much more interventionist ¨C it¡¯s got an industrial strategy, it¡¯s prioritising particular places, it¡¯s got missions.¡±

Labour is ¡°more interested¡± in how universities can help these specific missions, like supporting defence, Westwood said.

Simons agreed that the government doesn¡¯t ¡°instinctively think about universities as an actor in the major policy priorities¡±.?

¡°It¡¯s not that there¡¯s hostility, it¡¯s just that there¡¯s an absence of a view, an absence of a vision, an absence of a plan [from government],¡± he said.?

Universities needed to show the government the specific ways in which they can support its plans, he continued. ¡°Talk about how universities can serve national missions, not how national missions can make universities even better.¡±

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helen.packer@timeshighereducation.com