With the majority of the government’s research commitments already revealed, the autumn budget included minimal new information in this area; however, it did unveil several decisions that will impact higher education. The most contentious is a fee levy on international students that will contribute to maintenance grants for underprivileged students enrolled in qualifying courses.
Starting in August 2028, universities will be required to pay £925 per international student annually if their intake exceeds 220 overseas students each year. This equates to a 4.9% levy on the average annual fee of £19,000 for an international student; the government had initially suggested a 6% levy. Government projections anticipate that the levy will generate £445 million in its inaugural year.
New maintenance grants, which will complement maintenance loans, are set to begin in the 2028–2029 academic year. First- and second-year students will benefit from a sliding scale of means-tested grants offering a maximum of £1000 a year for the most disadvantaged individuals. However, eligibility will be restricted to those studying specific – yet to be verified – subjects that align with the government’s industrial strategy. These subjects are likely to encompass STEM fields.
Investment from UK Research and Innovation (UKRI) in block grant quality-related research funding, along with Higher Education Innovation Funding, will be preserved in real terms until 2030, resulting in a total increase exceeding £425 million. The budget also confirmed that tuition fee caps for the next two academic years will be adjusted in accordance with inflation. Consequently, English universities will be able to charge up to £9790 in the upcoming academic year and surpass £10,000 for the first time in 2027–28.
Earlier in October, the government confirmed that UKRI will receive an unprecedented £38.6 billion for 2026–2030. This includes £14 billion allocated for curiosity-driven research, £9 billion for specific high-performing areas like quantum technology and engineering biology, £8 billion for governmental priorities such as climate resilience, and £7 billion aimed at supporting innovative companies. The funding for the Metascience Unit, which facilitates research focused on enhancing the impact and efficiency of science investment, will triple to £49 million. The Advance Research and Invention Agency’s funding will grow from £220 million annually to £400 million by 2029–2030. All of these funding allocations derive from the £86 billion earmarked for public R&D as established in the spending review in June.
“Recent announcements regarding R&D funding reflect a welcome recognition of research-intensive universities as key contributors to growth and public services,” remarked Tim Bradshaw, chief executive of the Russell Group. “Despite this and the favorable decision to increase tuition fee caps, several financial hurdles persist. The international student levy will considerably affect universities’ capabilities to invest in teaching, research, and communities, but a flat rate fee should help avoid the complications of a percentage-based model.”
The international student levy has sparked widespread apprehension. The Campaign for Science and Engineering (CaSE) contends that during a time when numerous universities are already facing financial strain, its effects will be “unpredictable” and potentially “harmful.”
“The government frequently emphasizes the significance and value of UK research and the role of universities in it, though not in the chancellor’s address,” stated Alicia Greated, CaSE’s executive director. “It is challenging to reconcile this positive language with the international student levy. I urge them to collaborate with the sector regarding the ramifications this policy will have on the research ecosystem.”
While welcoming the reinstatement of maintenance grants, Malcolm Press, president of Universities UK, highlights that the international student recruitment market is competitive and that fees within the UK are already considerable. “[With the] levy, universities now confront the possibility of either diminishing cross-subsidies that underwrite teaching and research, or increasing international fees further, which could drive down international enrollments and ultimately restrict our capacity to assist UK students.”
From a chemistry standpoint, the RSC forecasts that the significant financial difficulties encountered by the university sector, currently resulting in reductions in staffing and course offerings, will become “more pressing” due to the international student levy.