Conclusion 29

The Department told us it was very aware of the financial sustainability issues facing universities. It pointed to government decisions to increase the proportion of research funding that goes to universities as a block grant, and to allow tuition fees to rise with inflation. We questioned whether the Department and UKRI were doing enough to ensure that public money only 55 Qq 27, 74; C&AG’s Report, paras 11 and 2.14. 56 Qq 27-28 57 Q 47 58 Q 27 59 Q 28 60 Qq 6-7 61 IRI0027 62 Q 6, C&AG’s Report para 3.6 16 goes to financially stable universities.63 UKRI and the Department argued that as universities are independent institutions, government should not be seeking to control the detail of their business decisions, staffing mix and plans for achieving outcomes. We were not convinced – as the Department and UKRI are ultimately responsible for the value for money of the sector. The Department’s view is that some universities’ deficits may be a result of investment decisions that are perfectly legitimate given their balance sheets, while other universities’ deficits are more worrying.64