University budget reduced by €1.1 million as government cuts public expenditure to tame deficit

The University of Malta has been informed that its budget for this year is being reduced by €1.1 million as part of government’s spending review.

In an internal communication, UOM Rector Alfred Vella informed faculty deans on Tuesday that the university’s recurrent budget has been reduced.

He also informed them that the UOM’s budget for next year is likely to be kept at the same level as this year after the cut.

According to the budget estimates for this year, the UOM was allocated €89.3 million.

Vella expressed concern that the budget cut will leave very little money for anything else apart from salaries and essential services. At least 85% of the UOM’s recurrent expenditure is committed to salaries and 10% to essential services such as utilities, cleaning, periodicals and software licences.

“Not much will be left over to manoeuvre the various other needs or improvements,” Vella told deans.

He added that what was more worrying is the indication that next year’s budget allocation will be kept the same as this year. “Taking into account the salary increases and inflation on other expenditure, the estimated recurrent budget reduction will amount to between €3 and €5 million,” Vella said.

This is the first public entity – the UOM is funded by the government despite enjoying a degree of independence – for which a specific budgetary cut has been made public. The rector’s letter was leaked to Nationalist Party education spokesperson Justin Schembri, who published it on his Facebook page.

Spending review to curb expenditure

Government is currently undertaking a spending review to curb expenditure as a result of a much bigger outlay on energy and fuel subsidies.

MaltaToday had reported at the end of last month that Finance Minister Clyde Caruana had asked ministers to find €200 million in budgetary cuts.

Caruana had set aside €200 million to cushion the impact of rising energy prices when presenting this year’s budget. However, this was before the Russian invasion of Ukraine that has caused energy and food prices to spike.

Government has been pumping subsidies to keep electricity and fuel prices stable and also helping wheat importers with a further outlay of €6 million.

Malta’s inflation remains the lowest in the Eurozone thanks to government intervention but questions have been raised on the sustainability of public finances if the prices of energy and fuel continue to increase. The deficit last year stood at 8%, the highest in the EU, although Malta's public debt remained well below the 60% mark. However, the expenditure on energy and fuel subsidies has prompted the spending review in a bid to keep the deficit in check.

PN condemns university budget cut

In a statement on Tuesday, the PN spokesperson “condemned” the university’s budgetary cut, accusing the government of being stingy.

“The PN believes that money spent on education is an investment for the future and not a propaganda tool,” Schembri said. “The beautiful statements used by government, such as ‘The Malta we want for our children’ as a theme for this year’s budget, were nothing more than cheap propaganda that do no justice to our children’s future.”

The PN spokesperson said the UOM, which is already operating on a restricted budget, faces cuts that will shackle its professional development.