Second wave of extra science cuts may pay for Con - Lib deal on student fees

To pay for a Conservative - Liberal deal on student fees, ministers are considering the possibility of a second wave of extra cuts to science budgets after the Comprehensive Spending Review.

Speculation in recent weeks has focused on cuts of about £1 billion, or 15 per cent, in funding for university research. But now the cost of financing a political deal over student fees could trigger a second wave of cuts.

Ministers continue to flip-flop over the question of whether to break down the budget for the Department of Business Innovation and Skills into its components in the CSR, I have been told this morning.

A breakdown would provide separate budget lines for the Higher Education Funding Council for England, Research Councils UK and further education. As well as clarity, this would provide security for the research councils against any future demands on the BIS budget.

But ministers are backing away from a quick decision on whether and how to implement the recommendations of the Browne Review on student fees. The problem is that with 54 Lib Dem MPs pledged to vote against higher fees, the whips cannot guarantee David Cameron a majority for a vote in the House of Commons. And the BBC reported yesterday that the government would not provide a response to Browne until after the CSR is announced on 20 October.

Consequently, ministers will agree cuts to BIS spending before any agreement is in place over how universities can replace that lost income with higher student fees. Although ministers are talking tough on cuts, they may need to sweeten the deal on fees with extra student subsidies to bring enough Lib Dem MPs on board to win a vote in the Commons. The question then becomes who pays if the money raised by higher fees is less than expected in the CSR - universities, BIS or the Treasury. And by declining to break down the BIS budget into its components at the time of the CSR, ministers open the door to BIS picking up the tab.

Whether to break down the BIS budget or not seems like an arcane bit of Whitehall budgeting policy. But the wrong decision come Wednesday week could cost science billions in the coming years.