UK spring forecast tightens belts
The UK’s Spring 2026 economic forecast signals continued tight public spending and constrained university budgets — meaning education institutions will face harder choices on what gets funded. Targeted capital lines still exist, but operating and compliance spends will be under closer scrutiny. (commonslibrary.parliament.uk)
The Office for Budget Responsibility published its March 2026 Economic and Fiscal Outlook on 3 March 2026 and downgraded its GDP growth forecast for 2026 to 1.1% from 1.4% in November 2025. (commonslibrary.parliament.uk ) Chancellor Rachel Reeves presented the Spring Forecast to the House of Commons on 3 March 2026 and made no new tax or public spending announcements, saying major policy changes will be reserved for the annual Budget. (gov.uk ) The OBR’s fiscal figures show government borrowing is forecast to fall from £153 billion in 2024–25 to £133 billion in 2025–26 and on to £59 billion by 2030–31 under the March 2026 outlook. (commonslibrary.parliament.uk ) Day‑to‑day departmental spending is tightly constrained: the 2025 Spending Review sets resource departmental expenditure limits (RDEL) to grow only about 1.2% per year in real terms between 2025–26 and 2029–30, with total departmental budgets rising 2.3% across the SR period. (gov.uk Spending Review 2025 ) Targeted capital lines remain small and competitive for higher education: the Office for Students published capital allocations of £88.5 million for 2025–26, of which roughly £80.6 million was awarded through a competitive bidding round. (officeforstudents.org.uk wonkhe.com ) Sector bodies quantify the squeeze: Universities UK calculates government policy decisions will reduce funding to higher‑education providers in England by about £3.7 billion between 2024–25 and 2029–30. (universitiesuk.ac.uk ) R&D allocations remain a mixed signal — the 2025 Spending Review pledges a record £86 billion of public R&D across the SR period, while UKRI has paused several applicant‑led grant routes at councils including BBSRC and MRC as it implements a new funding model (pauses noted in March 2026). (ukri.org ukri.org )
