Alex Proudfoot, Chief Executive of Independent Higher Education (IHE), said:
"This grant letter from the Department for Education is a body blow for higher education providers and their students at the worst conceivable time. Many providers are already facing redundancies and an uncertain future, and today's funding cuts will hit hardest those responding to student demand for diversity, innovation and flexibility in their higher education.
"The biggest problem with these decisions is how late they have been made. This is no way to improve the financial sustainability of the sector. We are told time and again – including by Ministers – that failures in the governance of higher education institutions are responsible for their woes. These words stick in the craw today with a brand new financial crisis brewed entirely in Whitehall. Barely two months before the start of the academic year, and without any hint of a warning, hundreds of thousands of pounds have been stripped out of budgets long since approved, for courses long since timetabled, for students whose places were long since confirmed.
"The decision to remove funding for accelerated degree courses is the hardest to fathom, and financially flawed, given the significant savings they generate for both students and the taxpayer. These courses drive growth and productivity, ensuring students can contribute to the economy faster, but this grant letter threatens to make some of them financially unviable just a matter of weeks before they are due to begin. It could easily cost the Government more money than the tiny amount it will save if students are forced onto three-year degrees instead, but in any case such wanton disruption to people's lives cannot ever be justified.
"The fees that providers can charge for accelerated degrees were due to be brought in line with other courses at last this year, thanks to the LLE. But when its introduction was pushed back by another year these courses were made even more dependent on this grant, as the Government must surely know. Now institutions face a significant funding gap in 2025-26 for delivery of some of the most critical courses for supporting economic growth – accelerated degrees, level 4 and 5 qualifications, creative industries and postgraduate courses in professional occupations – with no time to adapt. This will inevitably mean some courses being cancelled, with a direct hit to the sustainability of some institutions at a time when financial pressures are everywhere.
"It is also short-sighted to defund all franchised provision at a stroke without any evaluation of quality, or any effort to understand how this money is used. This is a sledgehammer policy that could force universities and colleges into costly mid-contract changes and have a material impact on the student experience. Its rashness stands in stark contrast to the Government’s measured approach to introducing greater regulatory scrutiny of franchised provision, which we very much support. Other tough decisions, such as the defunding of postgraduate programmes, may have less widespread effect but for a small number of providers the damage will be acute.
"A few weeks before the academic year starts, the Government itself has just created a significant additional risk of course closures, and the associated breach of students' consumer rights, that did not exist yesterday. Providers have been put in an impossible position, and it is students who will suffer. How does the Government propose that they respond?
"We urge Ministers to reconsider these damaging decisions, and at the very least to grant the Office for Students the flexibility they will need to mitigate the worst of the impacts on the students most affected."