BUFDG Digest 21 October

BUFDG

We have added lots more detail to the Finance Festival mini-site, including new sessions and speakers information across all three days. There's a few more details to come, but now is the perfect time to start planning your personal event programme 16-18 November. Your ticket gives you access to as many or as few sessions as you'd like, register now to secure your spot. And please remember that anyone in your institution can attend (not just those in your finance team) – so please do circulate the link to others who you think might benefit.

SECTOR

The latest Home Office visa data shows a 19% reduction in student visa applications compared to this time last year, amid reports of increasingly cautious recruitment practices as universities seek to avoid breaching the 5% Basic Compliance Assessment refusal rate threshold. Meanwhile, an International Development Committee hearing highlighted the contribution international students, scholarships and research partnerships make to the UK's global influence, while BusinessLDN highlighted the £12.5bn annual contribution international students make to London's economy, warning against policies that could deter future demand. Following previous speculation that access to student finance may be linked to minimum entry requirements, the FT (£) reports that “Ministers will lay out plans within weeks“ and DfE is considering “a range of options” for a minimum English language requirement to access student loans. With the next EU-UK Summit scheduled for 20 November, tuition fees for EU students are increasingly being reported as a significant sticking point in wider UK-EU negotiations (£).

The government is aiming to strengthen the link between universities and regional growth with the announcement of a £1bn investment in local innovation clusters, giving regional leaders a greater role in directing research and development funding towards local economic priorities. This new report from Policy Exchange argues a new generation of technical higher education institutions, modelled on NMITE and the Dyson Institute, are needed to help address local skills shortages and widen participation in areas underserved by existing provision.

New DfE statistics showed the number of English-domiciled learners entering higher-level (Levels 4-8) learning rose by 2.5% in 2024/25, although growth was driven largely by apprenticeships, which increased by 15.1%. The apprenticeship agenda continues to evolve, with debate around measures designed to encourage greater participation by younger people coinciding with the government's new Industrial Strategy jobs plans, which aim to create more than 100,000 jobs and training opportunities a year.

The latest Institute of Student Employers survey found graduate recruitment increased by 4% in 2025-26, although growth was just 0.8% once a small number of large employers are excluded.

A new Advance HE and Wonkhe report on “Developing mid-level leadership to build capacity for strategic change” finds that mid-level leaders are an under-utilised asset in driving strategic transformation in Higher Education.

Universities UK’s is hosting a webinar as part of the ongoing Transformation and Efficiency Programme on 4 November, considering Culture change as an enabler of financial sustainability and draw on Moorhouse Consulting’s experiences of culture change with university executive teams.

This HEPI blog makes the case for improving processes, reducing duplication, and strengthening collaboration between professional services teams, stating that “Across higher education, it is staff who keep institutions running while transformation programmes are delivered”. Elsewhere, the UCU is calling on the government to prevent universities from using wholly owned subsidiaries to employ new staff, arguing that the practice risks creating a two-tier workforce.

PRE-BUDGET ROUNDUP

With the Autumn Budget now just days away on 28 October, the sector continues to make the case for higher education. Universities UK reiterated requests for protected Strategic Priorities Grant funding, a transformation fund and VAT flexibility on shared services, greater flexibility for those universities obligated to offer the Teachers’ Pension Scheme (TPS), and commitments to annual tuition fee increases. Universities Wales called for an inflationary uplift to both core funding and the maximum tuition fee for 2027-28 as “an immediate priority”, alongside a wider review of higher education investment. And ResearchPlus, the Russell Group, and MillionPlus have all recently published submissions.

The IFS Green Budget, the Institute for Fiscal Studies' annual pre-Budget assessment, warns that higher inflation, rising borrowing costs and mounting pressures on public services will leave the Chancellor facing difficult spending decisions. Wonkhe's James Coe argues that the government's focus on economic resilience and increased defence spending could squeeze already stretched public finances and limit the scope for additional investment in higher education. Questions have also been raised about the relationship between science and defence funding after ministers confirmed that elements of the government's defence package were funded from the former Department for Science, Innovation and Technology budget, amid continuing concerns about savings at major research facilities.

Join IFS the morning after webinar for overnight analysis of the key announcements, or KPMG for a deep-dive on Friday 30 October.

The Scottish Government has previously confirmed that the 2027-28 Scottish Budget will be presented on 3 December 2026.

ENGLAND

A thought-provoking piece from Wonkhe’s Post-18 Project argues that Labour's higher education offer should be simple: "you can go, you can afford to stay, and it will add value when you leave", highlighting concerns around student maintenance support and the affordability of the student experience. 

Meanwhile, providers are reminded that the Office for Students' interim financial return is due by 13 November 2026, as the regulator continues its enhanced monitoring of sector financial sustainability. The OfS has also been focusing on the growing number of commuter students, publishing research and hosting a sector webinar on how universities can better support students whose travel arrangements may affect participation, wellbeing and outcomes.

SCOTLAND

Scotland's Future Framework programme continues to gather pace, with Sally Mapstone, Principal of University of St Andrews, appointed to lead the sector transformation strand with collaboration, shared services and curriculum planning among the options being explored.

The Scottish Funding Council has confirmed a £1.5m 2026-27 allocation for its tuition fee anomalies grant scheme, which universities can claim for when tuition fees received do not match the assumptions made in the Main Teaching Grant.

In the media, former MSP Des McNulty has called for a joint universities and colleges reform commission, there are reports that University of Dundee has not yet met the conditions required to access a further £7m of emergency support from the Scottish Funding Council, and Scottish Government's ‘baffling’ support for Scottish students attending Irish universities is questioned at a time of continued pressure on domestic higher education funding.

WALES

Medr has published its first full annual report and accounts, covering its first complete year as Wales' tertiary education regulator The report highlighted Medr's growing analytical role, including publication of its first assessment of the financial sustainability of Welsh higher education, and investment of more than £1bn across Wales' tertiary education and research system.

The independent Welsh higher education review has formally begun, with the appointed panel meeting for the first time to examine how higher education in Wales is funded, organised and regulated.

Universities Wales has published new briefing material on participation in higher education, warning that Wales risks falling short of future workforce needs unless participation increases, with the organisation citing forecasts that more than 400,000 additional graduates will be needed by 2035.

And the IFS is extremely disappointed (and probably angry?) that the Welsh government has just reneged on its pre-election promise of a 2028 revaluation of council tax bands.

TAX AND PAYROLL

IR35, employment status, off-payroll working, "that annoying test we keep having to do", or whatever you prefer to call it, remains one of the most searched-for topics on the BUFDG website. To support members, we've published “What CEST Says vs What CEST Means”, a practical guide to some of the more commonly misunderstood questions within HMRC's Check Employment Status for Tax tool. Rather than suggesting what answers should be given, the guide aims to help users understand what HMRC is actually trying to establish and reach more informed and defensible status determinations.

The other big development is publication of the long-awaited Annex M to the Framework for Higher Education Partial Exemption Special Methods (HE PESM), covering the treatment of non-business activity. With many institutions about to begin work on their Partial Exemption Annual Adjustments, we're making the document available via the BUFDG website ahead of publication on HMRC's webpages. HMRC has asked BUFDG to make members aware that it cannot be relied upon until it has been formally published on HMRC webpages.

HMRC has updated ESM2420, providing further clarification on the umbrella company joint-and-several liability rules introduced from April 2026. The updated guidance explains which UK entity may become liable for unpaid PAYE and NICs where overseas entities are involved in a labour supply chain, a point likely to be of particular interest to institutions engaging workers through complex labour supply arrangements. Further discussion is available on the BUFDG website.

Our monthly edition of TaxHE is also available. 

PROCUREMENT

The government is making procurement a more strategic tool for policy. Starting with the Procurement Act 2023 and subsequent reforms, government has placed greater emphasis on using its spending power to deliver wider economic and social outcomes, including growth, innovation, skills development and support for SMEs. With public procurement representing significant expenditure each year, ministers increasingly see it as a key lever for achieving national priorities.

Recent developments demonstrate how prominent procurement has become: in July Andy Burnham pledged to use "public procurement to back British industry", while in August Louise Haigh sought to simplify procurement requirements and increase the focus on jobs, apprenticeships and local economic growth. Meanwhile, high-profile discussions around contracts awarded to companies such as Palantir highlight how procurement decisions are increasingly linked to issues of national capability and public value. Even the UK space strategy published in September mentions procurement 25 times and states a government intention to "[u]se government’s procurement power to strengthen our domestic supply chain, support local jobs and build a long-term market for innovation, by refocusing our grant programmes for businesses to enable fewer, higher-value awards aligned with our priorities." For universities, this signals a future in which procurement teams are not only concerned with value for money, and being a key part of the H E transformation plan from UUK, but also demonstrating wider institutional and societal impact.

This Wonkhe article makes a strong argument that procurement has a key role to play in sector transformation, but that meaningful change will require deeper collaboration between institutions rather than simply better purchasing arrangements.

The deadline for feedback on the Procurement Value Survey is fast approaching, with CFO/FD and Heads of Procurement input sought by 23 October.

SUPC will host a webinar on AI in procurement and recruitment on 4 November, looking at how institutions are beginning to apply AI across sourcing, supplier management and recruitment processes

FINANCIAL REPORTING

The Department for Business, Innovation and Science Trade (DBIST) is continuing stakeholder engagement on its proposed Modernisation of Corporate Reporting (MCR) reforms ahead of the consultation deadline on 30 November. The proposals aim to streamline and modernise UK corporate reporting requirements, with potential implications for annual reporting, filing and assurance arrangements. The Financial Reporting Group is supporting the FEHE SORP Board with a consultation response.

The next SORP implementation forums are scheduled on 24 November and 27 January. A reminder that there’s a range of SORP resources on the Knowledge Hub online, including Model Financial Statements for H E.

RESEARCH AND INNOVATION

The British Academy has published a new report examining the future of the dual-support system, setting out the “trade-offs and tensions embedded within the current system in how and where we fund research”. Adding to the ongoing debate about how universities can continue to support world-leading research in an increasingly challenging financial environment, this Wonkhe thought piece argues that expectations around research and economic growth have become overly simplistic, and that many of the benefits of university research are long-term, indirect and difficult to capture through the lens of growth metrics.

UKRI has announced a voluntary exit scheme as part of its wider transformation programme, on the expectation that its future operating model will require fewer roles in some areas and more in others. ARMA members (£) can read a recent Q and A with Professor Sir Ian Chapman, Chief Executive of UKRI.

UKRI has also published a new Research Data Policy, intended to bring greater consistency to expectations around the management, sharing and reuse of research data, with implementation applying to new in-scope funding opportunities from April 2027. There’s a webinar on 25 November for those wishing to find out more. Elsewhere, the latest Knowledge Exchange Framework (KEF6) results show “growth in university knowledge exchange outcomes.”

The National Centre for Universities and Business (NCUB) is preparing to launch its annual State of the Relationship report on 8 December, examining trends in university-business collaboration and innovation across the UK. The event will be held in-person and online.

Updates from the recent Innovate UK quarterly meeting and the Research Finance Forum have been published on our website, including useful tips relating to the use of AI in research compliance.

PENSIONS

UCEA has published the results of its USS employer consultation, reporting strong support for the valuation's core methodology and an overarching preference for long-term stability, sustainability and the continued provision of valuable benefits for scheme members.

Pensions remain a major strategic issue for the sector, with a recent KPMG analysis for Wonkhe exploring the cost, risk and workforce implications of higher education pension arrangements across USS, TPS and LGPS. We’ve also created a new home for our regular pension updates on the BUFDG website to help you keep track.

Please note the Pensions Under Pressure: Helping Universities Balance Cost, Risk and Talent webinar has been rescheduled from 22 October to 10 November. The session, hosted by Howden, will examine how institutions are responding to pension cost pressures and managing risk across USS, TPS and LGPS arrangements, with practical examples and case studies from across the sector.

JOB OF THE FORTNIGHT

We thought we had double vision when compiling this fortnight's jobs section. Not so, but we couldn’t choose between two with the same title so our jobs of the fortnight are both Finance Business Partner: one at the University of Edinburgh, supporting research infrastructure, and one at King's College London, working with senior stakeholders to drive financial performance and decision-making.