During the Budget negotiations, I secured an additional £20 million to support skills development, which alleviated the budget reduction to further and higher education. The further education budget has been reduced by £12 million, which follows on from £4 million annual efficiencies that were required in recent years.
To help address the budget cuts, colleges have utilised the voluntary exit scheme, with the exit of over 400 college staff. I have tried to ensure that front-line services are protected as far as possible. Inevitably, the required cuts will have implications for the provision offered. Colleges are estimating that there will be approximately 20,000 fewer funded part-time enrolments. Approximately half of those are recreational courses. Colleges are increasing fees for recreational courses to mitigate the cuts.
Looking forward, the new strategy for further education extends and reaffirms the role of further education colleges as engines of the economy through skills.
The higher education institutions' budgets reduced by £16·1 million, and they have made savings over the past four years amounting to £37 million. I also released around £8 million in spending power over coming years to the universities by reducing the minimum level of reinvestment in widening participation programmes from 20% to 10% of additional student fee income.
The universities have acted to protect the narrow STEM subjects which are essential for our future economic growth and prosperity. However, they have had to reduce the number of undergraduate places and have launched early severance and voluntary exit schemes.
As higher education funding from government continues to decline, it is clear that our funding model is unsustainable. Therefore I have launched the Higher Education Big Conversation to involve as many people as possible in shaping our unique solution to supporting higher education going forward. Once complete, I will take stock of all options and present them to the Executive.
A lot of work is ongoing by way of business and community interaction. It is worth noting that our local universities perform extremely well in the UK context and, certainly, punch well above their weight in areas such as consultancy, knowledge-transfer issues, spin-out companies — those types of indicators.
There is, perhaps, greater scope for growth in relation to how we do from UK research council bids. The difficulty there is that we are battling a trend towards the consolidation of big-scale research projects into fewer and fewer universities, particularly as the scale of the project becomes an important consideration. As well as that, we have the issue of being on a different island from that on which things are often happening elsewhere in the UK. That makes the challenge of what we have to do almost double.
Nonetheless, this is an area where more work can be done. We also have the potential to access European funding, and great work is happening to put in bids for Horizon 2020. As the Member will be aware, we have a contact-point network in place across my Department and DETI with support from a number of other Departments, with people employed solely with a purpose of processing grant applications to the European Union. Beyond that, we also have North/South cooperation between DEL and the Science Foundation Ireland (SFI) and also the US-Ireland research alliance, all of which are other ways in which we can bring additional money into the higher education sector.
Would the Minister's efforts to address the funding difficulties be made much easier if many of his Executive colleagues did not adopt a head-in-the-sand attitude, particularly in their approach to finance, including welfare reform? Does he now regret not voting for the current year's Budget?
First of all, let me say that we have to press on with welfare reform. That is of primary importance. I also have to say to the Member that the situation would have been helped a little bit if the decision had not been taken by the Executive regarding the reallocation of the premia cuts that I had proposed to the teacher training colleges. His party was very much party to that decision.
Overall, my party did take the view that we were not in support of the Budget. We took that democratic decision because we did not feel that the Budget was sufficiently strategic. However, once that decision had been taken, we honourably followed through with decisions that have been taken to support the legislation around all that and to ensure that our Departments remain within the Budget envelope that has been allocated to us. Unfortunately, I do not think that those comments apply to the conduct of his own party when it was in office until fairly recently.
The Minister will be aware that a number of job losses are imminent next year, not least at B&Q in my constituency. What efforts are being made with his Big Conversation around colleges for those people who are somewhat later in life and find themselves out of work during that time? How will those training opportunities or services that people usually avail themselves of through the colleges be ring-fenced for the future for those people who need that type of upskilling?
I have to say to the Member that it is very difficult to contemplate ring-fencing anything in the current climate, because real carnage is happening to budgets for skills in both the universities and the colleges. Let me stress that our colleges, in particular, are there to engage directly in the upskilling of the workforce. That is a service for all ages. They will work directly with companies to put together some very particular training programmes, as well as the more general provision that they offer. They are also the key delivery partners in our new strategy on apprenticeships.
Beyond what the colleges offer, we also have redundancy services where we can put together particular clinics. With particular reference to B&Q, the offer is there of direct assistance that we can provide to any individuals who are very sadly being made redundant in that context.
It is worth referencing where we currently sit in the context of finance. We have had a cut in the region of £16 million in the current financial year. That builds on top of what has been an emerging structural deficit for our universities approximating to £40 million. These are all per annum costs. That amounts to a difference in funding per place in Northern Ireland compared with the rest of the UK of between £1,000 and £2,500, which is a very significant difference. If it is not addressed, it will call into question the quality of our higher education product compared with that of others. There is very real danger there.
On top of that, we have quite understandable demands for the expansion of the higher education sector, particularly with reference to the Magee campus in Derry. If that were to go ahead, we would be talking about an additional commitment — again, per annum — from the Executive in the region of around £30 million. Very quickly, you see that we have a funding pressure for higher education in excess of £80 million per year.
We are not simply proposing that the system carries on in future as it did before. We need to rebalance and reprofile our higher education offer and we need to see a greater shift towards STEM subjects and engagement in the provision of employability skills. Our universities are also potential partners in our apprenticeships strategy, particularly around degree-level apprenticeships, which take into account part-time study alongside someone being in training on the job in that particular context. That is a very tall order, given the amount of money that we are talking about. However, it is achievable if we are prepared to do things differently across a whole range of aspects of how we conduct business in Northern Ireland, from addressing the costs of a divided society through to revenue raising and other reforms in key public services.