03 December 2025 
Amanda Darley, Head of Operations and Engagement
It’s been a busy fortnight for higher education with the Budget, a raft of announcements around research and research funding, and much more. So grab a cuppa ready to catch up with the headlines and highlights in our Digest…
BUFDG
With huge apologies for the recent disruption to our website and the E-learning outage, we are delighted to let you know that everything is now fully operational and is also hosted on new and improved servers and an upgraded E-learning platform. You will therefore find that our E-learning platform looks a little different and more user friendly, and that our website works a little better. If you are still having issues, please try refreshing the webpage and clearing your cache. (If that doesn't work, get in touch with Amanda).
BUDGET
There were announcements large and small that impact on the H E sector in last week’s Budget, and Andrea and Julia have rounded them all up in our TaxHE Budget Special. They also hosted a member roundtable meeting earlier today where they presented the main Budget changes and opened up for member discussion. The recording of the session will be available on our webinars page shortly.
The two biggest Budget announcements for higher education were the increase in employer (and employee) national insurance contributions on salary sacrificed pension contributions (only the first £2,000 sacrificed per year will now be NIC-free) and the conformation of the international student levy, along with details of how it will operate (summarised in this discussion). Andrea will be running three roundtable sessions on the levy, two open to all members on 15 December and 21 January, and one on 14 Jan exclusively for CFOs/FDs. This will enable us to gather member feedback on the operation of the levy to inform BUFDG’s response to the technical consultation (which universities can respond to individually as well).
You can read Universities UK’s pre-Budget parliamentary briefing on the International Student Levy here, and you can also read the Wonkhe higher education budget summary here. And a YouGov poll of 4,500 adults conducted two days before the Budget shows 26% strongly support the levy, 31% somewhat support it, and only 18% are opposed.
SECTOR
The OECD has issued a report on the financial sustainability of higher education, and concluded that H E systems across OECD countries “face multiple challenges” and “an increasing number of higher education institutions in OECD countries find themselves in a precarious financial situation”. As a result, putting H E on a “more sustainable financial footing may mean revisiting institutional and system-wide strategies and making choices about which objectives and activities to prioritise, and the institutional landscape, human resources and funding needed to achieve these. Potentially unpalatable decisions about what to stop doing and what to re-organise will often be required.” The report warns that the necessary reshaping of the sector will take “substantial efforts”. One to read? The DfE and devolved governments surely will. The next OECD thematic report on H E will focus on student financial aid systems.
The Institute for Fiscal Studies published a response to post-16 white paper, including commenting on the international student levy, before more details were announced in the Budget. On the levy, the IFS comments that the “government should be clear on the economic rationale for such a levy, which would constitute a tax on the UK’s exports. There is no meaningful sense in which the revenues raised from this levy will “pay for” the reintroduction of maintenance grants for some students, as government has claimed’.
The University of Essex has “taken the incredibly difficult decision” to close its Southend Campus from summer 2026, and is in talks with the SU about how to minimise disruption. THE reports that the University “intends to begin a phased redundancy process across its operations, with plans to cut about 200 academic roles this year, and professional service roles by 200 over the next two years”.
Wonkhe’s Michael Salmon has been noting some government moves and rhetoric around apprenticeships and wonders if Level 6 apprenticeships are at risk; HESA has published data on student spin-outs and entrepreneurship; and the Competition and Markets Authority (CMA) has cleared the anticipated acquisition of Empiric Student Property Plc by Unite Group.
If your institution is currently thinking how it may need to adapt to the changing demands from government, funders, regulators, and prospective students, here is a collection of interesting and relevant blogs and articles from the past fortnight:
The Civic 2.0 programme has been launched to engage national and regional policymakers in the economic and social role HEIs play in their towns, cities and regions, aiming to “help politicians and policy makers come up with policies and incentives which enable this positive role to expand, helping the social and economic development of towns and cities up and down the country”. The funders of the programme include some of the founding university partners from the Civic University Network including Birmingham, Newcastle and Queen Mary, alongside regional research organisation Midlands Innovation. They will be seeking additional partners to the campaign as the programme progresses, while developing a long-term plan for financial sustainability and membership.
Wonkhe reports today that the UCU ballot for industrial action on the 2025-26 pay round did not meet the statutory turnout threshold.
The Guardian reports that the UK “aims to secure agreement to rejoin Erasmus student exchange programme”, hoping to finalise a deal by January.
ENGLAND
Last week’s Education Select Committee hearing makes interesting viewing/reading (with the recording here and the transcript here). While Skills Minister, Baroness Jacqui Smith, was keen to stress that there are no disorderly exits expected imminently and it would be “wholly irresponsible if anybody did say that”, Susan Lapworth, Chief Exec of the OfS, explained that there are currently 50 providers in their level two (“concerned about the risk of exit within the next 12 months”) and three (“a two to three-year horizon”) categories – this is made up of around 20 large providers with more than 3,000 students, and 30 smaller providers. Lapworth stressed that OfS is being “pretty conservative” with these risk assessments to ensure they are “on the front foot and … having all the right conversations with each institution and the wider range of stakeholders”. Jacqui Smith had earlier in the hearing stated that the government “would and in smaller cases have intervened in order to support students and would intervene to support important research or to protect the interests of taxpayers” but was clear that the “objective” of the intervention would be students, research and taxpayer interests (i.e. not necessarily the survival of an institution itself).
In addition, Jacqui Smith could not see the need for an H E commissioner, but instead talked about DfE providing support to “map the market” and “could see a more central role [for DfE] that might enable an analysis of where there were gaps and where it might be beneficial for there to be collaboration in order to fill those gaps”. Patrick Curry, Director for Higher Education Oversight at the DfE, elaborated, describing “a market monitoring function, which is recognising … the need to have a more collaborative and joined-up vision of where the sector is headed. That data and information can then be used in those regional conversations to shape the decisions of individual institutions to make sure we have more collaborative and joined-up offers for students in those areas.”
Sadly, when asked about VAT being a barrier to sharing services in the sector, Jacqui Smith said it was “not something that has been raised with me as the primary thing that is preventing it from happening” and referring to the Budget the following day added “it is not something that is within my power to change either”. (I can hear Andrea sighing from here!).
Wonkhe also has commentary on last week’s hearing. And yesterday the Education Secretary, Bridget Phillipson, answered questions on universities (as well as Ofsted and SEND issues) from the Committee – you can watch the recording of yesterday’s hearing here (no transcript yet), including the new maintenance grants, and questions (but apparently no answers) around graduate repayments.
It’s almost old news now, but the latest OfS Financial sustainability update for H E providers in England was published the day after our last Digest. As it was published prior to the international student levy details being announced in the Budget, the OfS modelling in the paper did NOT include any impact of the levy. Even so, the OfS modelling suggests that “the sector could see a total net reduction in annual tuition fee income of £437.8 million in 2025-26 compared with the sector’s forecasts”. This could result in 124 providers (45%) reporting a deficit in 2025-26 (compared to 96 forecasting a 2025-26 deficit in their AFR24). “The modelling also shows that 45 providers could have less than 30 days’ liquidity in 2025-26” (compared with 41 providers forecasting this). These figures are based on the likely outcomes if no mitigating action is taken. Wonkhe has a closer look.
HESA has published 2024/25 finance data for 70 English HEPs with financial year-end dates between 1 August and 31 December 2024 (non-traditional higher education providers with many specialising in a small number of subjects).
The Innovation and Research Caucus has released its report on ‘University Financial Health and Implications in England’ Wave 1, based on interviews with 74 CFOs/FDs at English HEIs, and the report’s authors have written a blog for Wonkhe. Whilst we well know that UK universities face “serious financial challenges”, the report sets out to “provide consistent, timely, and representative information on the impact of financial stringency on universities’ investment and planning decisions” in this challenging situation.
The Guardian reports on the Budget announcement to freeze the earnings threshold for the repayment of student loans for three years from April 2027, with the NUS saying it will mean that the salary a graduate earns before having to repay will be “dangerously close” to the national minimum wage. Jim Dickinson at Wonkhe has also examined the impact of the Budget on student finances.
SCOTLAND
In an interview with THE, SFC Chair, Cara Aitchison said she thinks that offering “universities small amounts of money for ‘transformation’ projects could help drive change in the cash-strapped university sector” and that “solutions to some of the challenges we face are not down in the weeds, they really are at the highest level in terms of government policy and government priorities”.
A second meeting on proposed amendments to the Tertiary Education and Training (Funding and Governance) (Scotland) Bill is taking place today. Amendments from Higher Education Minister, Ben Macpherson, include a provision for the SFC to be able to “secure the carrying out of an independent examination into the financial sustainability of a post-16 education body”… “where it considers it necessary to do so”. Wonkhe’s Jim Dickinson had some initial thoughts on the amendments (including that Ben Macpherson “has tabled 23 amendments to his own bill”), and some more thoughts after the first day of Stage 2 consideration of the Bill.
The Scottish Government has launched its updated strategy for life sciences – a plan to make Scotland’s Life Science sector a £25bn industry by 2035.
The SFC has announced allocations of International Science Partnerships Fund (ISPF) Institutional Support Grant funding for 2025-26 from the UK Department for Science, Innovation and Technology (DSIT) - £2.04 million has been allocated across 13 institutions.
The SFC has published the ‘conditions of funding’ attached to the grant funding provided to the University of Dundee.
WALES
Last Friday the Welsh government formally confirmed that the tuition fee cap will rise to £9,790 for 2026–27, in line with England. Fees for2027–28 academic year “will be considered in the next Senedd term.”
Having addressed the Senedd, Minister for Further and Higher Education, Vikki Howells, has set out what she views as the key challenges facing higher education in Wales in this Wonkhe article: increasing participation; expanding lifelong learning; addressing unintended consequences of competition between providers; financial challenges for institutions and students; and, delivering for the economy. An evidence paper is due to be published in the next few weeks with a call for submissions from stakeholders to consider how to address these challenges.
Medr has also published institutional allocations for the International Science Partnerships Fund in 2025–26, with the £1.2m fund divided between four universities.”
TAX AND PAYROLL
Don’t miss our Bumper TaxHE Budget Special, and (shortly) the recording from today’s BUFDG Budget roundtable meeting.
There is still plenty going on for our members involved in tax and payroll before Christmas – Julia is in the middle of a tour of the country (we call it ‘Tax on Tour’ – it’s very rock and roll), attending the in-person regional Payroll and Employment Taxes meetings. There’s still time (just!) to book a place at tomorrow’s Scottish PEG meeting in Edinburgh.
And you can also book a place at any of the following (free) events: an online VAT/Imports/Exports issues surgery on 9 December, an online learning drop-in session on 15 December, the first online roundtable session on the International Student Levy and the associated consultation on 15 December (the others are on 14 January for CFOs/FDs, and 21 January for all members), and an online session on the tax implications of the new SORP on 16 December.
PROCUREMENT
The Cabinet Office has released a new Procurement Policy Note (PPN) which provides advanced notification of the upcoming threshold amounts which govern the procedures for the award of public contracts for goods, works and services as set out in the Procurement Act 2023.
From 1 April 2026, the Government Commercial Agency (GCA) will bring together the Cabinet Office’s central commercial teams and the Crown Commercial Service (CCS) into a single, unified body. This marks a major step in transforming how public procurement supports better services and delivers greater value. With over £400bn in annual public sector spend, the GCA will use its scale to negotiate better deals, shape supplier markets, and support complex procurements. The GCA will serve the whole public sector, offering streamlined access to commercial expertise through one accountable agency.
The latest Transforming Public Procurement Platform Update information is available on the BUFDG Discussion Board, including details of the recent migration project and future plans for the system.
Finally, we are in the process of adding the finishing touches to the annual Procurement Value Survey (PVS), and will be launching the survey imminently – Heads of Procurement in England, Wales, and Northern Ireland will receive the invitation to complete the PVS shortly.
COUNTER FRAUD
The Home Office has released guidance to help organisations protect against ransomware and spot weaknesses in their supply chains. It sets out practical steps to check the security of key suppliers and safeguard against vulnerabilities. Designed to make businesses more resilient and prevent hackers from exploiting the links that connect suppliers and customers, it was developed by the UK with Singapore.
FINANCIAL REPORTING
If you missed the recent showcase of potential lease solutions for SORP 2026, you can watch the recording and find the supporting information on the SORP Knowledge Hub, including demos from five solution providers and useful discussion on implementation. The next FEHE SORP Implementation Forum takes place on 20 January.
We’ve also got an online session on the tax implications of the new SORP coming up on 16 December, so book your place.
RESEARCH AND INNOVATION
It was a bumper fortnight for research and research funding announcements!
The Department for Science, Innovation and Technology has confirmed that core block grant research funding will rise with inflation over the next four years and published details on the alignment of UKRI’s funding with government priorities aiming to secure UK leadership in future industries, boost funding, and attract global talent.
The announcement was accompanied by the publication of a new UKRI Framework document, which sets out UKRI’s core responsibilities and the broad governance and accountability framework within which UKRI and DSIT will operate. UKRI has also opened a call for the next Chair of UK Research and Innovation (closing date 11 January) and published an updated corporate plan, acknowledging a refinement of focus to respond to new UKRI objectives and government priorities as they see out the current strategic period and develop new strategy and plans for 2027 and beyond.
Wonkhe has more on the new sense of direction, and the potential implications of “doing fewer things better.”
Additional UKRI announcements include the Special Educational Needs (SEN) Identification and Support Research and Innovation Challenge - the fourth UKRI coordinated programme under the £500 million Research and Development Missions Accelerator Programme (R&D MAP), funding new research into tools to identify special educational needs and support children sooner. The Medical Research Council is funding up to an additional £8.5 million to expand ‘early independence’ Career Development Award (CDA) and Clinical Scientist Fellowship (CSF) schemes to make it easier for international researchers to build independent careers in the UK. And, following feedback from the research community that expectations around matched funding were unclear and sometimes unfair, UKRI has introduced a clear policy confirming all UKRI funding opportunities will have NO requirements for institutional matched funding by default, and assessors won’t consider institutional matched funding when reviewing proposals.
The Academy of Medical Sciences and Wellcome have announced a new five-year agreement worth £27.3 million, marking a significant commitment to supporting biomedical and health researchers across the UK.
The agenda for the upcoming Universities UK Research and Innovation Conference on 10 December includes a ‘REF 2029 - moving forward’ presentation from Professor Dame Jessica Corner, Executive Chair, Research England and a ‘Next steps and Q&A’ session with the REF 2029 Steering Group. As notable REF updates are expected, both sessions will be livestreamed for free for those not attending the full event - register to livestream these two sessions here. Or you can register for the full event here (in person £340 or online £195).
INVESTMENT
The final two editions of the bite-sized 'Asset classes' webinar series are now available to watch, providing an introduction to 'alternative’ assets. These short videos were pre-recorded with Barnett Waddingham and are aimed at those working in H E finance looking to build a foundational understanding of investment concepts in a university context. You can also view the previous sessions on equities and fixed income.
PENSIONS
The big pensions news is the Budget announcement on reducing the national insurance benefit of salary sacrificing pension contributions for both employers and employees for salary sacrificed contributions over £2,000. Watch the recording of this morning’s online BUFDG Budget roundtable session for more details (available shortly!).
MISCELLANEOUS and JOB OF THE FORTNIGHT
There are still plenty of BUFDG events happening for the remainder of 2025 so check our Events calendar. Highlighting a few others not mentioned in the relevant sections above, all of the following are FREE online events: we’ve got Deputy Finance Director meetings coming up for South West DFDs on Friday (5 December), and DFDs in Wales next Tuesday (9 December); an Introduction to Hִ E for Professional Services Staff on 11 December (suitable for those in their first year of working in higher education); and a Time to Talk Income and Collection Management session on 12 December.
Our job of the fortnight is the Assistant Director of Finance (Financial Services) at the University for the Creative Arts, based at Farnham, Surrey. The role holder will be a senior member of the Finance Team who will deputise for the Director of Finance and provide professional leadership on all aspects of University-wide financial services, with responsibility for Financial Accounting (including cash, accounts receivable and payable) and Payroll and Pensions. UCA is looking for someone with “significant experience and detailed knowledge of Audit, financial control and regulatory reporting including FRS102, VAT and Tax returns and leading change to ensure processes are effective and efficient”.
As usual, lots of other vacancies can be found on the BUFDG jobs page.
