BUFDG Digest 4 June 2025

BUFDG  

The Understanding University Finance guide has been updated to reflect recent sector developments. Key changes include updates on MedR, the Living Wage, pension costs, tuition fees, and changes in the research funding landscape. The guide remains a valuable resource for anyone looking to build or refresh their understanding of university finances.  

There’s plenty on the BUFDG calendar this June, including Time to Talks on Income Collection and Management (20 June), Financial Planning and Analysis (26 June), and Failure to Prevent Fraud (26 June). Bookings are filling up for the excellent Introduction to HE for Professional Services Staff (23 June), a one-day development event aimed at all professional services staff within their first year of working in H E.   
  

SECTOR  

This will be the last Digest before the Spending Review taking place on 11 June, when the Chancellor will announce departmental budgets for the next three years and the government’s five-year capital spending plans. The Review is expected to align closely with the government’s growth agenda, and balance difficult trade-offs between fiscal restraint and ambitious investment. One area of focus will likely be on how the development of skills and workforce aligning with industrial strategy will impact research budgets. But with no news on sector reform expected and the Department for Education classified as an unprotected department that is likely to prioritise spending on schools and colleges, there’s unlikely to be major updates for higher education. 

THE (£) reports that the head of education practice at Public First thinks “The best outcome [universities] can hope for is not being completely hit over the head,” whereas former Labour adviser, Andy Westwood, professor of public policy, government and business at the University of Manchester says that “Over many years the sector has become used to talking in broad terms about how universities drive growth” but “this government is much more interventionist – it’s got an industrial strategy, it’s prioritising particular places, it’s got missions” and “Labour is ‘more interested’ in how universities can help these specific missions, like supporting defence”. We’ll provide a full breakdown of the implications for H E finance in the post-Review edition of the Digest.

In the meantime, the Institute for Fiscal Studies (IFS) has summarised what we already know about the spending outlook and what the key choices will be in their recent webinar. You can also sign up to their Spending Review analysis on 12 June, taking place live online 10.30-11.45am, where IFS researchers will provide their first look overnight analysis of the announcements. 

Universities UK has published its Transformation and Efficiency Taskforce report, aiming to help government and university leaders understand drivers for change, identify the conditions needed to support greater efficiency and transformation, and develop a shared understanding of the opportunities. The report, titled “Towards a new era of collaboration” marks the culmination of Phase 1 of UUK’s transformation and efficiency programme, with the development of guidance and workshops relating to catalysing change ongoing, and an evaluation of new shared service opportunities expected by early summer 2025. Ministers responded to the report with Science, Research and Innovation Minister, Lord Vallance, saying “….[t]he Government also recognises the sector’s challenges and will work with it to seize the opportunities for transformation set out in this report, including removing the barriers to collaboration where we can”, and Skills Minister Jacqui Smith saying the government’s forthcoming H E reform plans will “lay out more detail on our expectations regarding collaboration and transformation”. Research Professional highlighted the seven major asks of the report (£), including BUFDG’s recommendation regarding the restrictiveness of VAT rules on potential for shared services, and the Russell Group acknowledged the “strong appetite to collaborate further to realise efficiencies in the face of significant funding pressures” but highlighted that there is also “an urgent need for government support and reform that runs deeper. Efficiencies alone will not provide the solution. We need a funding model that ensures long-term sustainability”. 

In a complementary publication, UUK underscores why universities are critical to an industrial strategy and the role of higher education in delivering the UK’s industrial strategy, and makes recommendations to the government to ensure the sector can maximise its contribution to delivering the ten-year plan for economic growth.   

UUK also reported on the high-cost courses struggling to keep up with student demand due to financial challenges, despite aligning with key government-identified growth sectors, including AI, engineering, and healthcare. While universities receive a grant from government to cover the extra costs associated with delivering these subjects, the increasing funding gap risks demand outstripping supply and raises concerns about the sustainability of the UK’s ambitions for a skills-led industrial strategy. 

Just before UUK published its Transformation and Efficiency Taskforce report, the Competition and Markets Authority (CMA) published a blog about ‘Supporting higher education providers through beneficial collaborations’.  It acknowledges that “[w]hile some collaborations are more problematic under competition law, there are many areas where they are beneficial and pose no competition law risks”, and also states that the CMA “can also support collaborations that benefit the UK by making clear that we won’t prioritise enforcement”. The blog goes on to explain that the CMA has been in discussions with the sector and government “to understand concerns which may be preventing higher education providers from working together in ways that could be good for students or the economy”, and also covers what makes a good collaboration, where H E providers can collaborate, and what’s coming next, including the CMA looking at collaboration on course provision. 

Aston university has “torn up the traditional playbook”, claiming that the “era of universities operating solely as research and teaching centres has passed”, in its report about ‘pathways to success’ for both the university and its students. 

The DfE has published a letter from Bridget Phillipson setting out the priorities for Skills England for 2025-26. 

The Office for Students has announced a new Student Interest Board, a committee that will provide a new way for students to be directly involved in the OfS’s work. The Board will bring students together with staff and officers from students’ unions, staff from universities and colleges who work on student issues, and others who can share insights on the experiences of students. The OfS has also  released current student numbers for 2023-24. And the DfE has laid regulations before parliament for annual OfS registration fees to increase by 3.9% from August. 

UUK has published analysis showing that in 2025-26 alone (to date), government policy announcements have reduced H E funding in England by £1.4billion – and this excludes the “ongoing impact of policies over recent years” (e.g. the loss from international student fee and the real-terms erosion of the tuition fee). UUK’s news article sets out the loss (or gain) from each of the eight policies analysed. 

UCU’s latest industrial action plans have caused some head scratching and some interesting comments, given that the motion passed on 26 May is to “prepare for an industrial dispute with the Secretary of State for Education over university funding”. Whilst it is interesting to see that the unions have now acknowledged that much of the sector is in some degree of financial difficulty, DK’s piece in Wonkhe asks the practical question ‘How can you take industrial action against the Secretary of State?’, and legal experts have told THE that “the union should expect a legal challenge should it pursue the move”, with industrial relations experts weighing in that the motion is “mainly a propaganda measure” to “force the government to be more open about the future of higher education funding, to rally the troops”. 

The government has issued a research briefing on the recent immigration white paper which sets out a number of frequently asked questions. There is a lot of “no fixed date”, the “white paper does not say”, and  the “government has not confirmed” type answers in response to the questions, but the briefing does clarify that while most revisions to visa regulations do not require MPs to vote on them, “ the levy on international student fees and changes to citizenship rules, do require primary legislation (an act of Parliament) and therefore the endorsement of MPs”. In a webinar co-hosted by The PIE and the International Higher Education Commission (IHEC), leaders in international and higher education came together to discuss the immigration white paper, sharing their thoughts on the proposed changes, including the BCA metrics. You can access the replay here. 

Following up on the reports mentioned in the last Digest of a new UK scheme aiming to bring more global research talent to the UK, a letter from the Minister for Science states that the government “will set out further details on how we will improve our offer to highly skilled talent in due course”. 

The DfE has published a report commissioned from the Institute for Fiscal Studies on ‘Using graduate earnings data in the regulation of higher education providers’. The report does “on balance recommend using an earnings metric calculated from administrative data in regulation”, but emphasises that “the best option would be to integrate this new metric into the current OfS regulatory framework in such a way that it complements – rather than replaces – the existing B3 progression metric”. And whether or not this aspect will be lost in translation by the DfE and OfS remains to be seen, but the report also states that “any earnings metric should be treated as one of many sources of evidence on provider performance. Equipping graduates with skills that are valuable in the labour market is only one aspect of course quality. Earnings also only capture one aspect of graduates’ success in the labour market; other factors such as job security or fulfilment at work may be as or more important for graduates. No earnings metric could fully account for the complexity of the higher education landscape. We recommend that the OfS continue considering the wider context in individual cases.” Wonkhe has some further thoughts on the report, and has also published a blog from a microeconomist at Manchester Metropolitan Business School suggesting we should be asking how graduates feel about their jobs, not just what they earn. 

Incoming chair of the OfS and outgoing H E Student Support Champion for the government, Professor Edward Peck, has written a new policy note for HEPI on 10 trends likely to change higher education in the coming years. It offers prompts for productive discussion and innovation in the sector at a challenging time, including comments on tuition fees, Artificial Intelligence, and the potential for stronger regionality in undergraduate choices.  

THE (£) reports on the publication of a draft code of ethical university governance from the Council for the Defence of British Universities (CDBU), which warns that “Governing bodies ‘too focused on competition, not sector health’”, quoting Steven Jones, one of the authors as saying “You do need people who are experts in being able to keep universities financially afloat, but I think there’s maybe a little bit of distance that has crept in between the governing body … and the communities of staff and students”. He has also written about the draft code in Wonkhe, and Jim Dickinson questions what reform of university governance should look like. 

 
FUNDING  

Having not been around when the DfE and OfS published the letter setting out England's grant funding for next year (previously reported in Wonkhe and our previous Digest), Wonkhe’s David Kernohan has now run the numbers and looked at which providers are likely to be most affected by the cuts, stating that “the signs are not good for smaller arts specialists”. 

The Department for Education has announced it will be ‘refocusing funding away from Level 7 (masters-level) apprenticeships from January 2026’ to prioritise investment towards young people at the start of their working lives, rather than those already in work with higher levels of prior learning and qualifications. 

In case you missed it, the Lifelong Learning Entitlement overview has been updated to include definitions of foundation years as distinct from foundation degrees, and examples of bundles of modules.  

 
SCOTLAND  

The Scottish Funding Council (SFC) has published an interim analysis of institutional financial sustainability, offering a snapshot of the sector’s financial health and the pressures facing Scottish universities. The report highlights ongoing challenges around inflation, demographic shifts, and international recruitment, while also noting the importance of long-term planning and strategic investment.  

The SFC has also confirmed final university funding allocations for Academic Year 2025–26. There are modest increases in both teaching and research funding, while capital maintenance remains flat. The number of funded student places has been reduced, with the associated funding redirected to strengthen the teaching unit of resource.   

The CEO of the Carnegie Trust for the Universities of Scotland has written an interesting piece for Wonkhe on Scotland's free fees policy, wavering public support for it, and why the Scottish government is so resolute on keeping it. 

Wonkhe emails reported that Scottish higher education minister Graeme Dey was at the Holyrood education committee last week, giving evidence on the Tertiary Education and Training Bill. Regarding higher education finances, he said there was a “narrative” that financial sustainability is “only arrived at by more public money being provided”, whereas universities’ operating models were often part of the problem. Scottish Greens MSP Ross Greer is likely to propose an amendment to the legislation to address the issue of university and college principal pay which Dey agreed was an important issue to debate, and there needed to be “greater self-awareness” at a time of financial constraint. 

And the Scottish Parliament education committee is holding a one-off session on the financial sustainability of Scotland’s universities today (4 June), with representatives from Universities Scotland and the principals of three Scottish universities. The evidence session is being held in private, but you can read the meeting papers here. 

WALES  

Universities Wales reports a new funding award to boost Ireland-Wales research collaboration, with Ireland’s Minister for Further and Higher Education, Research, Innovation and Science and Wales’ Cabinet Secretary for Economy, Energy and Planning, announcing funding totalling €584,378 for eight successful projects under the Research Alliance Award initiative.  
 

NORTHERN IRELAND  

The Economy Minister has announced a Green Skills Action plan for Northern Ireland, which includes looking at the current skills ecosystem, and how to improve how the skills needed in the green sector are provided. The report notes that the H E sector is “an important route into senior roles in decarbonising sectors” but “there is scope to develop and diversify” the courses appropriate for the green sector, so that universities can be “responsive to movements in technology and the changing expectations placed on graduates”. 
 

FINANCIAL REPORTING  

The recording and slides for the 2025 Financial Statements webinar are now available. This annual workshop, delivered by members of the Financial Reporting Group and representatives from audit firms working closely with the sector, includes feedback from the comprehensive review of financial statements, accounting and audit matters,  disclosures, and how to work well with your audit firm.  

For those looking to learn more about preparations for the forthcoming SORP, there is still time to book on to the final regional in-person workshops taking place in London - 9 June (am), and Belfast - 10 June (am). If you were not able to attend in-person, you can watch the recording of the ‘Preparing for SORP’ webinar here. Bookings are also now open for the SORP Implementation Forum, taking place online 8 July, 10am-12pm. This meeting will be an opportunity to discuss the changes and implications involved in the adoption of the 2026 SORP, and will be chaired by Matthew Knight, Chief Finance Officer at University of Surrey, who has prior experience of implementing IFRS 16 in the NHS. The BUFDG FEHE SORP project team will also be in attendance. 

Due to strong interest from members on the discussion board, we are holding a couple of meetings for members to discuss their chart of accounts with their peers in other institutions, to compare best practice. As part of the meetings we will also consider whether it is practical for BUFDG to undertake a project to create a model/template chart of accounts (or set of charts of accounts for different types of HEP) for the H E sector. Book your place on either 9 June or 13 June. 
 

PENSIONS 

The government has issued the Local Government Pension Scheme (England and Wales): Fit for the future - government response following the closure of the consultation earlier this year. Julia has  summarised some of the main points and how they will affect H E in this discussion board post.  

HEPI has published a blog from the Chief People Officer at the University of Portsmouth, setting out some of the benefits and drawbacks of the university’s new subsidiary company employing new staff with a defined contribution pension scheme, in response to the ever-increasing TPS contributions. The subsidiary was launched in August 2024 and the university saved over £1m in 2024-25, and is projecting savings of £2.8m next year and £4.4m in 2026-27.
 

TAX AND PAYROLL 

UHR, BUFDG, and HMRC are co-hosting a joint webinar on National Minimum Wage (NMW) compliance on 2 July, 1-2pm. This session is designed to raise awareness of issues that are commonly found in HMRC’s NMW compliance checks, and will include practical examples as well as advice on how to rectify any identified issues before HMRC open a compliance check and signposting to additional support. The government issued a press release celebrating putting £7.4 million back into working people's pockets by identifying employers not paying NMW (representing around 60,000 workers). The naming and shaming list this time included one university (but related to only one employee), and while there are no details published, it's likely to be a technical breach.

A proposed amendment to the Immigration, Asylum and Nationality Act 2006 that aims to extend right to work (RTW) checks to gig economy and agency workers may have admin and resource implications for H E. Currently, these checks are not required for self-employed or agency-supplied workers, but the change would make all employers directly responsible for verifying the work eligibility of such staff, regardless of their employment status. 

Summary notes from the Deep Dive into China roundtable are now available, a session on the Middle East will be scheduled for early July.  

The Making Education Digital spreadsheet has been updated to include Kazakhstan.  

HMRC has updated its VAT payments on account (POA) guidance,There are a couple of points that require clarification so Andrea has contacted the H E Team will post any updates on this discussion thread.  

PROCUREMENT  

Under Section 70 of the Procurement Act, in scope contracting authorities will be required to publish quarterly data on payments over £30,000 made under public contracts, within 30 days of each quarter’s end via a central digital platform. The Cabinet Office is inviting three HEPA/BUFDG members to take part in a digital discovery to help shape the platform’s design and supporting legislation. They’re keen to understand how finance and procurement systems operate, how contract and payment data are stored and matched, and what’s feasible in terms of bulk data publishing. The commitment involves a one-hour session with the Cabinet Office digital team (plus possible follow-up). If you’re a finance systems specialist or contract/data manager with insight into reporting and compliance processes and would like to take part please get in touch, including details of the systems you use. This is a valuable opportunity to ensure any new requirements are proportionate and workable for the sector. 

The Green House Gas (GHG) Measuring and Reporting sub-group of the HEPA Responsible Procurement Group is looking for user feedback on the HESCET (the Higher Education Supply Chain Emission Tool). The sub-group is keen to understand how the HESCET is being utilised across the sector, how the outputs impact university activity and what improvements you would like to see. Please complete the questionnaire which should take 5-10 minutes, and is open until Friday 13 June. The results will be anonymised, and analysed results fed back to the sub-group to help shape future activity. Find out more about recent developments in the GHG Measurement & Reporting sub-group here. 

 
SUSTAINABILITY  

Energy Systems Catapult has launched a new Ground Source Heat Pump (GSHP) tool, described as a ‘national-scope screening tool for England which will guide initial feasibility studies for using ground source heat pumps as an option for low carbon heating for individual public sector buildings and sites’. Originally developed for NHS buildings, funding from the Department for Energy Security and Net Zero in early 2025 has enabled the scope of the tool to be expanded to include many more types of buildings including student accommodation, teaching and research facilities, and offices. The GSHP Tool is now live with all the building types available. 

A reminder that Scotland's Public Sector Heat Decarbonisation Fund application portal for Phase 2 applications has now closed.  

RESEARCH FINANCE  

Join the next Research Finance Forum on Wednesday 11 June 2025, 1.30-3pm. It’s an opportunity to connect with other BUFDG members working in similar roles and discuss sector relevant research finance topics, funder requirements, and what's on your mind. You can specify discussion points or topics you would find useful when booking your place, and we will do our best to shape the session around popular themes if you submit them ahead of the planning call on Friday 6 June. 

INVESTMENT  

Cambridge University's Banking Engagement Forum (BeF) has released an update on their latest activities. Following the publication of contact details for those institutions that met the objectives of the Request for Proposals for cash deposit facilities at the start of 2025, they are in discussions with another two full-service banks in the hope that they will meet the objectives before the process closes. The BeF are keen to hear from BUFDG members about any funds moved, mandate limit changes, or new mandates made since the announcement.  

The working group has also selected a fund manager who will be able to meet the climate and product objectives in relation to Money Market Funds, and are in the process of setting up product build meetings. Anyone wishing to be involved as a seed investor and help shape this process can contact them directly.  

The BeF also recently announced the first global bond index to address fossil fuel expansion.  

MISCELLANEOUS AND JOB(S) OF THE FORTNIGHT 

Jisc are running a webinar providing an overview of their new Network Services framework on 17 June 11-11.45am – register for your place here. 

Queen Mary University of London is seeking a Research and Innovation Special Projects Finance Officer to join their Joint Research Management Office pre-award team and provide expertise and specialist advice in all financial matters for internal funding streams, non-research projects and Doctoral Training Partnerships (DTP's). This hybrid role supports research across the medical and non-medical sectors of Queen Mary University of London and Barts Health NHS Trust. The closing date is 16 June.  

BUFDG’s ‘umbrella’ organisation Professional H E Services is recruiting for an Operations Officer (Maternity Cover) to perform a crucial business support role. This role is for 22.2 hours a week (0.6 FTE) and is fixed term for a period of 12 months or the earlier return of the postholder. The anticipated start date is the 1 September 2025 to allow for a handover period with the current postholder. For more information visit the PHES website. The closing date for applications is 16 June, and interviews are online on 16 July.