26 March 2025 
Amanda Darley, Head of Operations and Engagement
This Digest is being sent out just before the Chancellor’s Spring Statement at 12:30 today (originally planned to be pretty much a non-event, while we wait for the Comprehensive Spending Review in June, but with so much change in the world recently there may be more to it than the government was previously planning…) so keep an eye on the discussion boards and next week’s TaxHE for Spring Statement updates.
Don’t forget that all the recordings from the Finance Festival are now available for members to view on our website.
We’ve recently published two brief summary documents, with the help of compliance consultant Keith Read, on the new Failure to Prevent Fraud offence (effective from 1 September 2025) and the Anti-Greenwashing rules (which came into effect last year on 31 May). We’ve kept the documents high level and as short as possible, so they are only a couple of pages long and should give you the most important details to be aware of.
We’re hoping that colleagues working in IT Systems/Technology, Income and Accounts Receivable, Accounts Payable, Procurement, and Tax will all contribute to our surveys on electronic invoicing, so we can best represent your views in our response to the joint consultation between the Department for Business and Trade and HMRC regarding e-invoicing, which will affect UK businesses and the public sector. Multiple responses from the same university are welcome. The surveys closes on 31 March.
The Education Select Committee has announced that it will hold “a focused single evidence session on 8 April” to examine funding issues in the H E sector, covering “domestic and international student numbers, pension contributions, and the rate of tuition fees” as well as “the role of research funding in supporting higher education and the distribution of financial challenges across different higher education institutions”. Committee Chair, Helen Hayes MP, said “[t]he UK’s higher education sector is in trouble. Dozens of universities are making redundancies and cuts to courses, trying to stay afloat amid uncertainty over where their money is coming from.” BUFDG will be making a submission to the committee hearing so if you have anything you think we should consider including, please get in touch with Amanda by the end of this week (28 March).
In a similar vein to the ‘cathedral thinking’ HEPI piece mentioned in the last Digest, Advance H E has published an article looking at whether governors are currently able to give long-term strategy the focus and attention it still requires while also dealing with the immediate financial concerns in many institutions. Crucially, the article also questions whether “the quality and relevance of the information governing bodies receive is part of the problem”, with governors voicing concerns about “the lack of discipline in how papers are presented, the consistency of information over time and the timeliness of data and information”, with the authors advising that it is “vital to move away from lengthy prose and towards clearer, more strategic summaries, enhanced with dashboards, key performance indicators (KPIs) and visual aids like diagrams that convey information more effectively”.
The OfS is set to resume processing registration applications from August, and the release of the OfS Risk and Audit Committee meeting minutes from December prompts more news in the FT(£) about HEPs potentially facing bankruptcy. Incoming OfS Chair, Professor Edward Peck, mentioned “five or six things that you routinely do” when facing financial pressures in an institution, and DK has had a go at identifying five such cost-cutting measures in Wonkhe, what their up- and downsides are, and how helpful they might be in different circumstances, noting that “questions like these are the start of a conversation – not the end”.
“Dealing with the immediate pressures on costs while also staring down the barrel of a call for reform is objectively a very difficult psychological space for higher education to be in” says Debbie McVitty in her Wonkhe piece on whether the H E sector should be thinking of evolution or radical transformation (or maybe it’s a mix of both). And a HEPI blog by Mills & Reeve LLP reflects the discussion at a meeting of 18 university leaders last month about how universities can best position themselves in the current financial climate. The discussion had a few different strands arising from the question “once the severance schemes, asset sales and course closures have come to pass, will these remedies be sufficient to put institutions back on a sound enough financial footing to continue to serve their students and communities for the longer term?”.
UUK has once again been joining the dots between the H E sector and the government’s growth mission with analysis showing that “the eight sectors identified in the industrial strategy as key to economic growth rely heavily on a graduate workforce”. In addition, government data show that “by 2035 the UK economy will require a workforce where 61% hold a higher education qualification compared to 52% in 2025 and 48% in 2020, further emphasising why widening access to higher-level skills will be key to supporting the workforce for the future should be a priority for the government.”
The Guardian reports that the Public Sector Fraud Authority has been directed to investigate student loan fraud, seemingly in franchised university courses, by the Education Secretary, based on an investigation by The Times - ‘Phillipson described the revelations as “one of the biggest financial scandals in the history of our universities sector”. She said “[t]oday’s revelations of major misuse of public money and potential fraud by students in franchised universities deal a hammer blow to the integrity of higher education in this country.’ The Education Secretary has now issued a statement, OfS has issued a response, and Wonkhe looks into franchised provision (again).
In other items, David Kernohan makes sense of the latest HESA data over on Wonkhe, this HEPI blog examines how we could build a truly tertiary education system in England, and, also on Wonkhe, Jane Harrison-White, Exec Director of AUDE (our fellow PHES organisation), talks about what women experience in the university estates profession. Professor Edward Peck’s start date as OfS chair has been confirmed as 7 July. And with the HESA staff record consultation closing soon (3 April), this Wonkhe blog looks at why it would be good idea to widen the coverage to include technical, professional, and operational staff, but the consultation also asks about “widening the coverage of the record to include staff not directly employed by the reporting provider” which could have important implications for employing staff in subsidiary companies, so it’s definitely worth a look.
Medr has published its first Strategic Plan. The plan was consulted on in September and October and has now been finalised. It has five strategic aims and one foundational aim, and in contrast to the new strategy that the OfS has just consulted on, the financial sustainability of the H E or tertiary sector at their headline level doesn’t make it into the headline level of any of these aims. However the document acknowledges the “challenges” and “fiscal context” the sector is “grappling with”, and the foundation aim – to establish Medr as a highly-effective organisation and trusted regulator – includes a commitment to “consult on a system of funding to support the tertiary education sector and ensure effective use of funding”. Universities Wales responded to the strategy, and Jim Dickinson shares some thoughts on Wonkhe.
Additional capital funding allocations for Welsh universities for 2024/25 were published yesterday, allocating £18.5m of funding. And the Welsh Innovation Network has published an impact report showing that “89% of Welsh research was judged to be internationally excellent or world-leading for impact” under the REF, and just over £2M of funding by WIN has leveraged £38M of additional investment.
Medr is also recruiting a new Chief Executive who “will be responsible for overseeing £1 billion of investment and leading a team of 120 experts. The mission for this role is to secure a responsive and coherent system of tertiary education, skills, research, and innovation.” While a “background in education is not a prerequisite for this role ... a keen interest in the future of education is essential.” Medr is seeking candidates “with experience of working with the Welsh Government and leading complex organisations.” Applications close on 14 April:
On 12 March the Senned held a short debate on ensuring Wales has a thriving university sector (transcript here). Asked whether the Welsh government has “a clear idea of the financial situation of Welsh universities” the Minister for Further and Higher Education responded “yes, we absolutely do”, going on to say “Medr is absolutely adamant in its belief that no university in Wales is at risk of going under, and we also are not looking at any mergers at all either.”
The SFC has announced a funding support package for the University of Dundee worth £22m, which is “a mix of financial transactions (low-cost loans) and capital grant”. In an Education, Children and Young People Committee meeting on 19 March, the university’s interim VC, Professor Shane O’Neill, explained that Dundee’s situation has arisen not just because of the external factors facing all universities, but because of issues within the university including “inadequate financial discipline and control of investment decisions… weak compliance and a lack of accountability at times in financial control”, and “inadequate oversight at executive and court levels”, and also a long-term issue in trying to achieve the right balance to cross-subsidise the research-intensive nature of the university (which is much more research-intensive than others of similar size and scale). Professor Pamela Gillies, former principal of Glasgow Caledonian University, will oversee an investigation into the financial situation at Dundee, with the terms of reference for the investigation published by the SFC - it will cover financial management, financial reporting, and governance and oversight.
A question on what steps the Scottish government is taking to review the H E funding model was raised in topical questions in the Scottish Parliament this week, with the minister responding that the government is “absolutely open to exploring the future funding model with our universities, albeit starting from the position that we will not reintroduce tuition fees”, that they have “had a preliminary conversation with Universities Scotland on the funding approach and have agreed to return to the subject before the summer”, and are open to “constructive cross-party discussions on the university funding model’s future, while recognising the changing circumstances that institutions find themselves in and what the sector’s future asks might look like.”
Scottish H E institutions must submit their Financial Forecast Updates by the end of this week (28 March).
Mercer is running a webinar about ‘Reputational Risk in UK University Investments’ on 2 April which will provide a platform for sharing insights and best practice to help institutions navigate the increasing demands surrounding exclusionary policies. The session will focus on your institution’s investments, but the concepts discussed will also be relevant and transferable to the investment strategies of any local pension scheme you might have. Find more information and register here.
Wonkhe reports that international researchers and doctoral students must continue to pay the immigration health surcharge upfront (for all years and for all dependants) after a proposal from the House of Lords Science and Technology Committee to allow it to be paid over time was rejected. One argument for rejection was that it is often an allowable cost to claim against research grant funding. But with the cost of this for research funders mounting, with CRUK confirming it now costs them £700,000 per year, Michael Salmon suggests that this “may not strike you as the best use of pressured research budgets”.
HEPI has published a blog from Professor Dame Jessica Corner, Executive Chair of Research England, in which she sets out two new initiatives being undertaken by Research England: “developing an approach, designed to be light touch and low burden that asks universities to report back on their use of strategic institutional research funding”, and to “monitor the implications for the sustainability of research in universities against the current financial context”. The blog sets out more details.
Ahead of the Spring Statement, THE reports that “financial modelling prepared by Research England reveals that the agency has begun considering how it would cope with a potential cut of almost 8% in mainstream annual QR funding from next month”. Technology entrepreneur, Tim Adeyoola, is set to become the new executive chair of Innovate UK, and ARMA’s new chair will be Grace McConnell, Deputy Director of Research & Innovation at LSE, from August.
There’s still time to book your tax conference place at the discounted ‘early bird’ rate – but be quick as the price goes up on 1 April. A list of sessions and topics that will be covered at the conference has been added to the discussion board, so have a glance through that and book your place here.
We recently published a useful table showing the VAT liability of various types of conferencing income and how the type of customer can impact this. This should be useful to estates and commercial services staff, as well as tax staff, so feel free to share the link with colleagues.
HMRC has recently made a change to the guidance on what qualifies for the VAT relief for medicinal products and substances, and updates to the legislation will follow. Andrea has set out a helpful comparison between the old and new definitions for you.
Julia has signposted UCEA’s useful update on the recent immigration changes.
Find out about plans to develop the Responsible Procurement Group (RPG) GHG* Measurement and Reporting sub-group and its future work on the HEPA discussion board. Plans include the expansion of the remit of the group from the HESCET sub-group to the GHG Measurement and Reporting sub-group, new co-chairs and the formation of a Technical Review Group with opportunities to get involved in its work. (*Greenhouse Gas)
Training is now available on the 2025 Updates to the Cabinet Office Standard Contract Suite. Join the Cabinet Office team online for updates on the latest changes and improvements to the Procurement Act-ready standard contracts. Sessions are available to book using these links on Thursday 27 Mar 1-2:30, Monday 31 March 10-11:30, or Thursday 3 April 11-12:30.
The National Security Grounds - Exclusions Annex 2 guidance has been published on gov.uk. The National Security Unit for Procurement (NSUP) will soon be launching their own web page, but in the meantime you can find out more about their work on the Procurement review Unit (PRU) website.
On top of recent employer contribution increases, the DfE has confirmed that employee contributions to the Teachers Pension Scheme will increase by 0.3% for those earning £34,873 or more. The salary bandings for the different contribution rates are also increasing by 1.7%. The original consultation from November provides more details, and information is also available on the TPS website.
And Julia has summarised all the recent changes to the NHS Pension Scheme for you.
We’re holding an online global mobility roundtable meeting tomorrow, a Time to Talk about Medical VAT Reliefs on 1 April, and we have a Time to Talk with USS for senior finance leaders on 3 April. We’re also looking forward to a collaborative event/initiative with AUDE, AHUA, and UCISA colleagues looking at how to reimagine the university estate for a financially sustainable future on 9 April – this initiative will explore the role that estates might play in delivering a more efficient future as universities coming under growing financial pressure, leveraging AUDE’s 2024 Estates Management Report and insights from other key associations, and the webinar will explore this through case studies.
Job of the fortnight is the Head of Financial Accounting at the University of Durham - a key role within the Finance Department, and responsible for the Financial Accounting function which incorporates Treasury/ Cash Management, Financial Reporting, External Audit, Balance Sheet ownership and Capital Management, along with the Accounts Payable transactional processing function. There are lots more jobs available on our Jobs page.
