Stormont budget: Tuition fees could go up to £7,000 a year to raise money

The Department for the Economy (DfE) has modelled increasing university tuition fees to about £7,000 a year from the current £4,630 to raise money.

But significant changes to fees would require a decision by a Stormont minister and a change in legislation.

The department has to find savings of about £130m in 2023-24.

That will mean cuts to funding to universities, Further Education (FE) Colleges and bodies like Invest NI, Tourism NI and NI Screen.

Revenue-raising measures such as a rise in tuition fees would be longer-term and would not help the department’s 2023-24 budget position.

Its annual resource budget in 2023-24 – for day-to-day spending – is just over £772m.

The department said that was 16% lower than it had expected, and it is about £50m less than its baseline budget from two years ago.

It made savings of £75m in 2022-23 and has to repeat those this year and also find £55m in additional cuts.

Almost three quarters of the DfE budget is spent on education and skills including funding universities, student finance, FE colleges and apprenticeships.

BBC News NI understands that the teaching grant to Northern Ireland’s universities – which subsidises places for Northern Irish students – is to be cut by £14m or around 8%.

But any reduction in student places would have to be a decision taken by individual universities.

Maintenance grants which help students from low-income backgrounds with living costs have not increased for a decade and will be frozen again at £3,475.

Previous plans by DfE to fund all-age apprenticeships for people aged 25 and over have also had to be put on hold.

The funding for FE Colleges is being cut by about £9m while funding to NI Screen is being cut by £1m.

There are six FE Colleges in Northern Ireland offering a wide range of qualifications but a review into the current FE structure is currently taking place.

Invest NI, which is also funded by the Department for Economy, is facing a 15% cut in funding.

The organisation, which is responsible for economic development in Northern Ireland, has already been hit by a loss of EU funding.

It had made a 15% cut to its budget “in year” throughout the last year – which was considered to be a one off – that it now has to maintain as a new baseline.

This will mean it will have to look at ways of incentivising foreign direct investment, other than offering financial support.

It has 600 staff and a high level of funding commitments, which will heavily impact on its ability to offer any new support.

Invest NI said it would take time to assess the impact of the budget and was “aware of the continued budget pressures, heightened by the loss of EU (ERDF) funding”.

It said it had already implemented a number of measures to ensure the funding it has delivers the greatest impact.

This included prioritisation measures which “robustly challenge” projects based on anticipated economic value, tighter restrictions on multiple offers of support and a pilot programme to explore a competition-based approach to accessing its support.

It comes after a review by Sir Michael Lyons found that Invest NI needed urgent improvements in leadership, operations and public accountability.

Invest NI said the board was “committed to the transformative change needed for Invest NI to become a more efficient, agile and outcomes focussed organisation delivering an even greater impact throughout the economy”.

Tourism Northern Ireland will also see a significant reduction in its funding of £9m which is a 33% cut compared to last year.

Last year its budget was inflated because of additional Covid-related money.

It is responsible for the development of tourism, supporting the tourism industry and for marketing Northern Ireland as a tourist destination.

Tourism NI said the budget reduction would have an impact on its investment in a number of areas including events, marketing and capital development.

“Northern Ireland is very likely to lose out to other destinations just as our visitor numbers are rebounding,” it added.

“We will continue to find ways to make resources go further, working closely with our partners to mitigate the effects of the budget reduction on the sector.”