Leaving the European Union: Funding for Universities and Scientific Research

Almost half of university income in the UK comes from tuition fees and education contracts, totalling £15.6 billion (47 percent) in 2014/15. Home and EU domiciled student course fees accounted for £10.481 billion of this, with £4.226 billion coming from fees paid by non-EU students. Students from EU countries (other than the UK) represent 5.5 percent of students at UK universities. Full-time students from EU countries other than the UK are eligible to apply for a tuition fee loan of up to £9,000 per academic year, like UK students. Following the referendum in June, there has been doubt expressed about how EU students will be categorised once the UK leaves the EU and how this will affect university income. There are suggestions this may result in a fall in EU students coming to the UK but that such a scenario may present income opportunities for universities should such students be eligible to be charged the same fees as non-EU students. In October 2016, the Government announced that EU students applying for university places in England in the 2017-18 academic year would continue to be eligible for student loans and grants. This has also been confirmed by ministers in Scotland, Wales and Northern Ireland. Research policy is a shared competence between the EU and member states. According to the Office for National Statistics, UK gross domestic expenditure on research and development performed in the UK in 2014, in current prices, was £30.6 billion. Business was reported as accounting for 65 percent of this expenditure; higher education (which includes universities and higher education institutes) for 26 percent; government and research councils for 7 percent; and the private non-profit sector (which includes registered charities and trusts) for 2 percent. The UK receives funds from the EU budget, worth around £5.6 billion per annum in recent years. These funds go to recipients across the UK, including to the science and research sectors. In 2014/15, EU sources accounted for 2.5 percent of UK university income, providing £836 million in research grants and contracts. The Prime Minister, Theresa May, has stated that the Government is committed to ensuring a positive outcome for UK science as the UK withdraws from the EU. In August 2016, the Government announced that it would guarantee funding for projects funded through the EU’s Horizon 2020 programme, even when specific projects continue beyond the UK’s departure from the EU. On 3 November 2016, the House of Lords will debate the potential impact of the United Kingdom’s withdrawal from the European Union on funding for universities and scientific research. This briefing provides information on current university and research funding in the UK and identifies some of the key issues raised about this funding following the UK’s referendum vote to withdraw from the EU.