Vince Cable’s campaign to convince the Treasury that his is the “ministry for growth” appears to have paid off with the business secretary allocated last-minute funds to protect his science and regional growth budgets from swingeing cuts.
The business, innovation and skills department’s £6bn science and innovation budget is expected to escape relatively unscathed with cuts “comfortably below” 10 per cent in real terms, while extra money is expected to be put into the £1bn regional development funds.
Meanwhile, the Treasury is backing Mr Cable in his determination to develop high-tech economic clusters – drawing on the German Fraunhofer model that connects industry with the country’s research base – with elite innovation centres set to go ahead. Mr Cable is likely to make a separate announcement on this next month.
Protecting the science budget and regional growth funds from cuts is a significant coup for Mr Cable and David Willetts, the minister for universities and science, who at one stage in the negotiations faced cuts of 20 per cent or more from science funding.In the run-up to the spending review, the business department settlement had been identified as one of the more difficult to nail down in the face of coalition tensions over the issue of tuition fees, which the Liberal Democrats had pledged to scrap during the election.
However, Mr Cable’s broad support of the Browne report into higher education – despite resistance from his own party – has impressed his government colleagues and helped bolster his negotiating position in the latter stages of the talks, said aides.
Mr Cable’s consistent message that his was the “ministry for growth” also resonated within government as ministers look to the private sector to fill the gaps left by the retreating state.
“There is an understanding that we do need to have the tools to drive the economy,” said one person familiar with the discussions. “That’s what the government will want to be focusing on, having made these cuts.”
The business department’s overall budget cut is about 25 per cent but most of that money will be coming from the huge cuts earmarked in university funding. The £5bn teaching budget is set to be slashed by about 75 per cent. The net cut in university funding – half of his department’s budget – is about 40 per cent. Universities will claw back this funding through charging higher tuition fees, as outlined in the Browne report last week. In other areas, the adult skills and further education budgets will be cut by about 25 per cent and “refocused”.
