The Wonkhe Show Budget, R&D, Scotland’s Tertiary Bill
Nov 27, 2025
Ken Sloan, Vice-Chancellor at Harper Adams University, shares insights on the new university funding model shaped by Budget 2025. Debbie McVitty discusses the impacts of the proposed international student levy and maintenance grants. David Kernohan highlights the challenges of frozen loan thresholds and the risks of funding concentration in larger institutions. The panel dives into Scotland’s Tertiary Education Bill and its implications for cross-subsidy and institutional costs, revealing a landscape of both opportunity and caution for higher education.
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Flat Levy Reshapes Cross-Subsidy
- The international student levy will be a flat £925 per student, with first 220 students exempt to protect small providers.
- Flat fee design creates wide effective tax-rate differences between institutions and shifts cross-subsidy dynamics, David Kernohan explained.
Levy Threatens Cross-Subsidy Models
- The levy reduces universities' growing international fee income and may limit their ability to cross-subsidise teaching or research without clear reinvestment plans.
- Institutions face unequal effective tax rates; smaller or lower-fee providers can be disproportionately hit, David Kernohan noted.
Delay Rigid Spending Until Skills Systems Align
- Keep levy proceeds flexible to allow government to fund priorities beyond maintenance, such as skills and regional needs.
- Delay rigid commitments until Skills England and local skills plans align to target funding effectively, Debbie McVitty advised.