Ministers will review funding distributed by the English higher education regulator to support high-cost subjects and other priorities such as widening participation after cutting its budget by ?100 million.

Education minister Bridget Phillipson has to the Office for Students (OfS) outlining how the Strategic Priorities Grant (SPG) funding it has available to distribute in the coming academic year will fall to ?1,348 million, down from the ?1,456 million it had last year.

The money is used to support universities that offer courses such as nursing and midwifery as well as other high-cost STEM subjects and degree apprenticeships. It also funds other priority initiatives including the Uni Connect access programme and world-leading specialist providers, where provision can be very expensive.

Making her first funding allocation since becoming minister last July, Phillipson writes it was against a backdrop of ¡°the extremely challenging fiscal context inherited from the previous government¡±.

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She signalled a review of the SPG to ensure it is supporting the government¡¯s ¡°long-term ambitions of growth and opportunity¡±.

From the academic year 2026-27, the SPG will be reformed, Phillipson tells the regulator, so that high-cost funding ¡°can be more effectively targeted towards priority provision which supports future skills needs and the Industrial Strategy¡±.

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Funding that supports student success should also be ¡°targeted effectively towards students from disadvantaged and underrepresented groups to participate and progress in HE, with clear demonstration of impact of interventions¡±, she adds.

Phillipson says high-cost subject funding should support sectors seen as offering the highest growth opportunities for the economy and businesses.

¡°Prioritising in this way does, however, involve making compromises elsewhere; for this reason, I am asking you to reprioritise high-cost subject funding away from media studies, journalism, publishing and information services courses,¡± she?continues.?

¡°While I recognise that these courses are valued by the universities that deliver them and the students that take them, my decision is informed by the challenging fiscal context we have inherited.¡±

The student premium fund ¨C which supports hardship funds as well as disabled students ¨C is also being cut and Phillipson said the regulator should achieve this saving ¡°by allocating student premiums on a basis which disregards courses delivered at franchised providers¡±.

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A separate ?84 million fund has also been handed to the OfS to distribute to support the growth of priority subjects in the sector.

Phillipson says it should allocate ¡°the majority of funds to providers through a competitive process to support specific projects and activities that will help address the government¡¯s missions and priority sectors for growth¡±.

John Blake, director for fair access and participation at the OfS, said the regulator was ¡°continuing to consider the approach we take to using our funding powers¡± and it will soon publish feedback received from the sector ¡°as part of our continuing work with government to review and reform our approach to funding¡±.

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But news of the cuts were greeted with frustration by university representatives.?Tim Bradshaw, chief executive of the Russell Group, said it was ¡°another?blow to universities already facing stark financial challenges¡±, adding that even subjects that had seen their funding protected had still received a flat cash settlement and therefore a real-terms cut.?

¡°Universities across the country are making efficiencies, but many are already facing difficult decisions to protect their long-term futures. A further squeeze on funding will undermine their ability to support the government¡¯s efforts to deliver the Industrial Strategy, improve public services and achieve economic growth,¡± Bradshaw added.?

Vivienne Stern, chief executive of Universities UK, said universities had been facing into the huge financial challenge they face by ¡°cutting costs fast on a?scale I have not seen in 25 years working in the sector¡±.?

¡°We¡¯re determined to ensure our universities deliver what this country needs ¨C great research, high quality university education and economic growth. But we need government to work with us to stabilise the ship and put it back on an even keel. That is the opposite of what happened today.¡±

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tom.williams@timeshighereducation.com