Research Gets a Lift, Classrooms Left Waiting in Latest Budget Outline

 Research and innovation (R&I) was one of the big winners from the spending review outlining the United Kingdom government’s investment priorities up to the next decade and beyond – but on the education front, universities appear to have failed to persuade the Labour administration to rescue them from the financial crisis.

Science and technology was promised a funding package rising to more than £22.5 billion (US$30.5 billion) a year by 2029, as Chancellor of the Exchequer Rachel Reeves reeled off a raft of big investment plans, designed to kickstart the economy, to the UK’s House of Commons.

More money was pledged for schools and skills training as well as research, defence and the National Health Service, but university leaders are frustrated that their lobbying has failed to convince the government that they need extra funding to avoid more cuts to teaching posts after a sharp fall in postgraduate international students knocked their plans for growth off course, as University World News has reported.

Reacting to the spending review announcements on Wednesday (11 June 2025), Vivienne Stern, chief executive of Universities UK (UUK), said: “The Chancellor is right to be proud of our world-leading universities which, by providing the skilled workforce and R&D that industry needs, will underpin renewal in every part of the country.

“The spending review has cemented the importance of R&D [research and development] funding to national growth, but this must translate into support for universities more generally if they are to ensure their stability in extremely difficult circumstances.”

She said the next challenge is to convince the government led by Sir Keir Starmer that higher education can help drive economic growth and expand opportunities and to win a sustainable funding settlement for the sector.

Losses of over £1 billion

In the run-up to the spending review, UUK lobbied hard and shared findings with the “in-house” parliamentary news magazine, PoliticsHome showing that government policies have led to losses of more than £1 billion for the higher education sector since Labour came to power in July last year.

The “negative” funding measures applicable to higher education teaching and running costs include some policy decisions made by the outgoing Conservative administration, such as increasing employer contributions to the Teachers' Pension Scheme by 5%, which UUK says will cost universities an extra £125 million a year.

But despite the relatively modest increase in domestic tuition fees to a maximum of £9,535 in line with inflation this year – the first rise in home higher education tuition fees since 2017 – UUK’s research shared with PoliticsHome showed that Labour's increase in employer national insurance contributions will cost the sector an extra £430 million per annum, while the cut in strategic priority grant funding means a loss of £108 million for 2025 to 2026.

On top of that, changes to foundation year fees will reduce funding by £332 million per annum, while the removal of government funding for level 7 apprenticeships is estimated to mean a funding loss of £108 million in 2025 to 2026. The cut in capital funding for teaching will cost the sector a further £66 million per annum.

The Labour government is also sticking to the ban on dependants for all but international research students coming to the UK, and the government’s recent immigration white paper proposed an international student levy of 6% of overseas tuition fees. UUK says this will cost UK higher education institutions another £600 million per annum if it goes through.

Stern told PoliticsHome: “It does feel like in the last few weeks, we have had a series of announcements that, rather than helping to address the underlying financial challenges facing the sector, just make them a bit worse.”

University World News reported earlier this month that a recent count by the University and College Union found that 93 universities (almost 70% of the sector) are making redundancies, and the number is growing.

‘Warm words don’t pay bills

Dr Diana Beech, director of the Finsbury Institute at City St George’s, University of London, and a former (Conservative) government adviser on higher education policy, told University World News while it was “encouraging to hear the chancellor acknowledge the UK’s ‘world-leading universities’ – and how this government is ‘proud of them’ – “warm words do not pay the bills”.

Beech said when it comes to education, universities clearly come “lower down the pecking order”.

She said it was also noticeable that the chancellor said the pending industrial strategy has been drawn up with businesses and trade unions, but there was “no mention of universities in the frame as a key stakeholder”.

Beech also warned that an unintended consequence of the decision to ban “zero-hour contracts” announced by the Labour government to end what some see as “precarious conditions for employment” would probably mean less flexible working arrangements for students who need “to fit paid employment around their studies”.

She said: “This move could well disenfranchise students further, whose needs were not mentioned by the chancellor in her speech and whose maintenance packages look set to remain unaddressed while many pensioners are set to regain their winter fuel payments.”

Beech’s warning comes as Advance HE and the Higher Education Policy Institute (HEPI) released their latest report (on 12 June 2025) based on the annual Student Academic Experience Survey, which showed a dramatic increase in the proportion of full-time undergraduates undertaking paid work during term time – now at 68% and up from 56% in 2024 and significantly up from just 42% in 2020.

“This significant shift is reshaping the university experience, with students reporting a notable decrease in time spent on independent study as they balance employment and academic commitments,” said the report, which was based on a survey of over 10,000 full-time undergraduate students across the UK.

The survey found that only 37% of students perceived their course as good value for money (down from 39% in 2024), with 29% perceiving it as poor value. Hours spent on independent study have decreased from 13.6 hours per week in 2024, to 11.6 hours in 2025.

Boost to R&I

Highlighting key features of the spending review, a government press release described the boost to R&I as a “transformative £86 billion boost to science and tech to turbocharge [the] economy” up to 2029.

The £86 billion covers the next four years, with the Labour administration saying it will prioritise investment in areas ranging from new drug treatments and “AI breakthroughs” to advanced manufacturing, defence and economic growth.

The funding package for R&I includes “dedicated awards of at least £30 million to each of the seven established Mayoral Strategic Authorities in England – Greater Manchester, West Midlands, South Yorkshire, West Yorkshire, Liverpool City Region, North East, and Greater London, as well as to one equivalent region” in Scotland, Wales and Northern Ireland to be agreed with devolved governments.

There will also be a competition, open to all other parts of the UK, to support high-potential innovation clusters to grow.

One such cluster already assured of funding is the Cambridge x Manchester Innovation Partnership involving the universities of Cambridge and Manchester.

This will be led by Research England and will receive £4.8 million over three years to strengthen the link between the two innovation hubs and help “pilot new approaches to collaboration, setting examples for cities, universities and governments worldwide”, according to the government announcement.

Supercomputer for Edinburgh

Among the early winners of the UK government’s new commitment to invest in R&I to grow the economy is the University of Edinburgh with the reversal of Labour's decision last August to cancel plans for a new supercomputer for Scotland’s capital.

The spending review said the British government will invest £750 million in a new national supercomputer to be based at Edinburgh University's Advanced Computing Facility.

An earlier plan by the last Conservative government to spend £800 million on an almost identical project was scrapped by the incoming Labour government within months of being elected last year.

The U-turn has been widely welcomed, with Professor Sir Peter Mathieson, principal and vice-chancellor of the University of Edinburgh, saying: “This significant investment will have a profoundly positive impact on the UK’s global standing” and will build on the university’s strength in artificial intelligence (AI) and computing, which goes back decades.

India overtakes UK in research publications

The spending review boost for science and technology comes as a new report indicates that the UK has fallen to fourth place, behind India, in the international rankings for world research publication shares.

The new analysis from the UK's Department for Science, Innovation and Technology, published on 5 June 2025, showed that the United Kingdom had swapped places with India in international comparisons of research strength – based on publication counts, citation counts, and highly cited publication counts.

The report, titled International comparison of the UK research 2025, said the fall was due to faster growth in other countries and that the UK’s scholarly output is relatively well-rounded across different fields. It is stronger than average in the humanities, social sciences and medical sciences but was slightly lower than average in publication shares in engineering and technologies, agricultural sciences, and natural sciences in 2022.

“The UK’s research base has a very high level of international collaboration,” said the report, with just over 60% of the UK's publications in 2022 co-authored with at least one non-UK researcher.

This was the highest amongst the comparators, which included the other G7 countries – Canada, France, Germany, Italy, Japan and the United States – as well as Brazil, China, India, Russia, and South Korea.

In world publication shares, UK researchers published 246,612 articles in 2022, corresponding to a 1.2% per annum growth on the 235,224 publications published in 2018, growing each year apart from a small drop between 2021 and 2022.

China (813,847 publications) overtook the US (753,195 publications) back in 2020 and became top- ranked publications producer and shareholder.

China accounted for 25.4% of world publications in 2022, while the US, India and the UK produced 18.2%, 6.9% and 6.0%, respectively, said the report, with India overtaking the UK in world publication shares for the first time in 2022.