BUFDG Digest 19 November

BUFDG

Andrea and Julia have just launched "BUFDG Paper - Introduction of the International Student Levy – Practical Concerns".  This document has been prepared following discussions at the BUFDG National Tax Group and in consultation with the wider sector. This paper sets out the concerns around the practical operation of the proposed international student levy (“the levy”) – it doesn’t cover the concerns (already done elsewhere) over whether or not the levy should be introduced. Instead, this paper looks at the issues that need to be considered. For more information, and to follow the discussion, use this thread.

SECTOR

Politics Home reports that government departments are split on how to implement the international student levy, suggesting that an option now under consideration is “a tax of £1,000”, with the Treasury in favour of this (harder to ‘game’, easier to implement, easier to communicate, would impact less on research intensives). But DofE, and smaller HEPs, are said to still favour a 6% levy.

UCEA has ‘responded to speculation’ that the Chancellor may announce a cap on salary sacrifice arrangements in the forthcoming Autumn Budget. It has estimated a cost of between £1m and £3m a year per institution. UCEA says it has “written to the Treasury urging it to carefully consider the financial impact of these increased costs to the Higher Education (HE) sector, given that many HE Institutions (HEIs) are anchor employers in their local communities.”

A new paper on TRAC from the Policy Institute at King’s College London launched recently. It found the methodology “is not providing the detailed insights needed to navigate the sector's mounting challenges”. It suggests that the education White Paper brings with it unique opportunity for reform, as well as improving how the data is used across the sector. The recording for the launch webinar is available on Youtube.

The Department for Education has published introductory information on the LLE – it explains the minimum number of credits that learners need to qualify for tuition fee and maintenance loans and information about the Lifelong Learning Entitlement (LLE) qualifications gateway.

The new CEO of ARIA will be the former head of DARPA's Information Innovation Office, Kathleen Fisher. ARIA is the UK’s R&D funding agency built to unlock scientific and technological breakthroughs, the creation of which was of course inspired by the success of DARPA in the US.

Former Chancellor Jeremy Hunt has written in the Times to make the case for further investment and support for research and spin-outs. He warns the government that policy changes risk killing off research commercialisation – what he sees as essential for national economic growth.

ENGLAND

The OfS has published its new strategy covering 2025-2030, following its consultation earlier this year. There’s an increased focus on collaboration “with student bodies, sector agencies and other partners to… foster a thriving ecosystem”, as well as sector resilience “in the context of constrained finances”. DK writes a summary for Wonkhe.

The OfS has published capital funding allocations for 25/26 – a not especially large £88.5m, of which just £7.75m was distributed through formula. The 60 winning institutional bidders had to demonstrate their bids were environmentally sustainable and supported the government’s priority sectors for growth.

A new report from Policy Exchange makes the case for the expansion of University Technical Colleges (UTCs), arguing that a side-by-side comparison with similar schools in the same local areas shows UTCs produce an outsized proportion of apprentices. They also take in a higher proportion of  SEND students and more on Free School Meals, but fewer who continue to become Not in Education, Employment, or Training (NEET).  

Wonkhe’s Post18 project has published a long-read article on reform to university governance in the UK, looking at arrangements across the continent as inspiration. It identifies recent failures in the UK where “boards were systematically “managed” by executives, were not provided complete information, and lacked structural mechanisms to access independent perspectives on institutional realities”. It suggests “embedding further stakeholder participation within governance arrangements – not as consultation but as structural elements creating countervailing power”, among many other ideas.

Skills England has published guidance on the development of the second round of Local Skills Improvement Plans (LSIPs), which “recognises the critical role of higher and further education in the skills system”. Michael Salmon writes in Wonkhe with the details.

SCOTLAND

The SFC has clarified the 31 December deadline for the submission of university financial statements. It has also launched a consultation on the allocation methods used for the Research Postgraduate Grant (RPG) and Higher Education Research Capital (HERC) Grant, to “provide a balance between burden and value and ensure they are fit for purpose”. The consultation closes on 13 January.

The Scottish Government has published the annual report of its international strategy. It focuses on a broad range of activities but with a section for Higher Education and Research, which it uses to plug the idea of a Scottish Graduate Visa. Meanwhile in the Herald, Minister for HE and FE Ben Macpherson is interviewed, and is non-committal on changes to university funding and the sector’s exposure and reliance on international students.

WALES

The Welsh government has published a six-week consultation on proposals for the new Local Growth Fund. The fund will distribute £350m over three years, and focus on barriers to growth for business, improving skills, green infrastructure, and regional development.

NORTHERN IRELAND

A new report published by a partnership between QUB and Ulster University, and funded by the Wellcome Trust, examines the research culture in NI and the strengths and challenges of the system. It finds, among other things, that there have been benefits to regional proximity and concentration, and in collaboration, but risks around supporting and retaining talent. There’s a discussion blog accompanying the launch on Wonkhe.

TAX AND PAYROLL

New umbrella company rules start in April 2026 where clients have joint and several liability for the umbrella company’s PAYE/NIC. We have a paper ready to publish, but we have just been waiting for confirmation by HMRC on how ‘purported umbrella company’ rules apply to personal service companies. We’ve published the response we received from HMRC here, and will be updating our draft report shortly.

For any queries relating to HMRC enforcement of the National Minimum Wage (and National Living Wage) - everything you didn’t want to know but were afraid to ask is available in our summary of the report here.

This British Council "Easy Step Guide for UK Universities on Indian Regulations", includes a number sections on Income Tax and GST. Search on "tax" to take you to the relevant sections. It also covers some issues that will be of interest to colleagues working in Global Mobility. You may also want to bring it to the attention of your international colleagues.

As usual, all the other Tax and Payroll news, as well as details and booking links for the dozens of related events over the next three or four months, can be found in the TaxHE newsletter.

FINANCIAL REPORTING

The Financial Reporting Council has issued International Standard on Sustainability Assurance (UK) 5000 “General Requirements for Sustainability Assurance Engagements”. Otherwise known as ISSA (UK) 5000, it is intended for voluntary use and provides UK assurance providers with consistent, internationally aligned standards in sustainability assurance engagements.

RESEARCH AND INNOVATION

The Research Administration as a Profession (RAAAP) global survey, conducted by the International Network of Research Management Societies (INORMS) task force, is open to all Research Managers and Administrators (RMAs) until the end of November. This iteration focuses on the professional identity of RMAs, and aims to help shape the future of research management and administration by capturing the profession’s breadth of roles, skills, values, and challenges.

NIHR are increasing the payment rate for public contributors in NIHR-funded research by 10% from 16 December 2026. Details of the increase from NIHR can be found here.

SUSTAINABILITY / ESTATES

We have updated our list of funding and investment for decarbonisation projects to reflect the closing of the latest round of the Green Heat Network Fund, and the pausing of Research England Development Fund while it is being reviewed.

INVESTMENT

The second installation of the bite-sized 'Asset classes' webinar series is now available to watch, 20-minute videos for those working in higher education finance looking to build a foundational understanding of investment concepts in a university context. Recorded in conversation with Dan Brady from Barnett Waddingham, the latest two-parter provides an introduction to fixed income  including what types of assets this includes, risk and return considerations, ESG aspects, and different investment approaches, then takes a deeper dive into strategic considerations, characteristics, Multi Asset Credit Funds, and cashflow matching strategies. The final sessions on alternatives will follow soon.

PENSIONS

USS have issued 2026 Valuation: Covenant Assessment and Data Collection - setting out requirements for UK universities to provide financial forecasts and supporting documents for the 2026 actuarial valuation, due to a revised regulatory framework. It explains who must submit data, what information is required from each UK nation’s universities, how confidentiality will be maintained, and outlines the purpose, assessing the strength of the employer covenant for funding the pension scheme. 

The USS Covenant team (alongside PwC) are running a webinar aimed towards finance - intending to provide more detail on the ongoing work to assess the scheme employer covenant with plenty of time left for attendee questions. The webinar is being run on Tuesday, 25 November from 12.30pm to 1.30pm and you can register here: Microsoft Virtual Events Powered by Teams.

There’s an interesting blog on HEPI, written by Jane Embley, Chief People Officer and Tom Lawson, Deputy Vice-Chancellor and Provost, of Northumbria University, detailing the university’s approach to reducing the TPS pension burden. It’s an interesting and creative response, and well worth reading if your institution is in a similar position with the scheme.

MISCELLANEOUS

The team at RSM have published two recent blog posts – the first is guidance for HE providers on the ‘Failure to prevent fraud’ offence that came in to effect in September. The second looks at lessons to be learned from Gillies Report – in particular how to use audit insight as a strategic tool. They have also produced the Autumn edition of their Emerging Risk Radar – useful insights for governance and planning.

An article in Wonkhe written by Kortext and the Higher Futures consultancy talks about the need for leadership and management in HE to get to grips with the strategic deployment of AI within their institutions.

Over at HEPI, Vincenzo Raimo and the team at CIL suggest universities should – in short – put their prices up for international students. They use modelling to show the outsized impact that headline price can have on income generation and university sustainability, compared to increasing enrolment or reducing recruitment costs.  

Jim Dickinson has a long and thorough article in Wonkhe arguing that the ‘market’ in HE – both the reality and the perception – isn’t working, and argues the CMA should re-run an expanded version of the 2014 OfT report on applying market mechanisms to public services.

Our Job of the Fortnight is for a Senior Finance Business Partner at the University of the West of Scotland. The successful candidate will have “Significant cost and income allocation and capital accounting experience”, and will “act as the principal financial adviser to Deans and Directors, providing expert guidance on financial planning, budgeting, forecasting, and performance analysis”. The deadline for applications is 30 November.

As usual, lots of other vacancies can be found on the BUFDG jobs page.