In my January monthly email I promised to keep you informed of developments regarding the Welsh Government’s draft budget for 2016-17. Following yesterday’s debate in the National Assembly, I am pleased to say that the headline reduction in funding for the Higher Education Funding Council for Wales will now only be £10m rather than the £41m that was originally envisaged. It is too early to say in detail how this might affect the funding for Cardiff University, but it is certainly much more in line with what we had anticipated. I should like to thank all of you for your support and also express my appreciation that the Welsh Government has listened to our concerns and amended the original proposals. Our case attracted wide support from across the political spectrum and I am most grateful for all the efforts that were made on our behalf.
The settlement is still tight (we do of course acknowledge the constrained state of the public finances), and we continue to face upward cost pressures in a number of areas. But while we still face many challenges, we can now at least approach them in a managed fashion.
You will be aware that since my email went out we have also announced details of a £300m bond issue that will be used to invest in new research and teaching facilities. You can find out more about the bond on the intranet and we have produced a short film with Mike Davies, our Director of Finance, explaining our finances and the nature of the bond.
The money we are borrowing is for long-term investment in our future and a key part of our overall strategy to become one of the top 20 universities in the UK and one of the top 100 in the world. It will enable us to create world-leading facilities. We cannot use it to make up the inevitable shortfall we are going to face in our day-to-day running costs.
In sum, we are not out of the woods yet but the very serious situation I had feared has been avoided. I will keep you updated as matters progress, and will write as usual at the end of the month.
With best wishes