The Welsh funding council is to have its funding cut by £41 million, or 32 per cent, under the Welsh government’s draft budget, prompting opposition claims that the reduction could “seriously damage” universities.

About half the money cut from the Higher Education Funding Council for Wales would be redirected into spending by the Welsh government on tuition fee grants, much of which goes to fund students studying at English universities under £9,000 fees.

Jane Hutt, finance minister in the Labour government in Cardiff, said yesterday that the Welsh government had faced a 3.6 per cent cut in UK government funding, once the effects of inflation were taken into account.

David Blaney, chief executive of Hefcw, said: “It is proposed that the Hefcw budget be reduced by £41 million, or 32 per cent, from £129 million in 2015-16 to £87 million in 2016-17. 

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“It is intended that £20 million of that reduction will be spent by the Welsh government on tuition fee grants, some of which will find its way into Welsh universities to cover some of the costs of teaching Welsh undergraduates.”

He added: “We currently invest the £129 million in research, part-time higher education, Welsh-medium higher education and in providing expensive subjects such as medicine and dentistry as well as conservatoire provision.

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“Our investment decisions respond to an annual remit from the Welsh government. A reduction of 32 per cent in our budget in one year will inevitably have considerable impact on these priority areas.”

Dr Blaney said that Hefcw “will meet early in the new year to consider the implications of the budget settlement”.

Simon Thomas, Plaid Cymru shadow education minister, said: “The Labour government is taking unprecedented amounts of money out of the higher education budget, and this is sure to cause huge worry for those in the sector who have never witnessed cuts of this size in their budgets.

“Labour has decided to take £41 million of funding away from the budgets of Welsh universities, whilst increasing its funding for English universities to £90 million through its tuition fees policy. This is a scandalous admission from this government that it is pursuing short-term headlines instead of making long-term commitments.

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“This will seriously damage the efforts of Welsh universities to deliver world-leading education to students and top-class research and development.”

john.morgan@tesglobal.com