All quiet on the £6K fees front while Labour works out how to fund the cut

Shadow chancellor Ed Balls wants to formulate funding before announcing policy

September 18, 2014

The Labour Party appears to have shelved plans to unveil a policy to lower tuition fees to £6,000 at its conference during a speech by leader Ed Miliband.

A £6,000 fee pledge remains the “direction of travel” for Labour but the policy is now more likely to be announced in October or November, Times Higher Education understands.

The delay has come because Ed Balls, the Labour chancellor, wants to thoroughly scrutinise the funding plan behind the policy, which the party believes will cost about £2 billion a year.

Some within Labour also fear that unveiling the policy at the conference would bring accusations of unfunded spending plans from the Conservatives, overshadowing the messages the party wants to get across during the conference.

At one stage it had seemed likely that Mr Miliband would confirm during his conference speech on 23 September that Labour would go into the election with a £6,000 policy.

David Willetts, the Conservative MP and former universities and science minister, today tells Labour that a £6,000 pledge would “jeopardise” existing spending on access funded by fees, meaning that “students from tougher backgrounds” would lose out. In an open letter to Liam Byrne, Labour’s shadow universities, science and skills minister, published by Times Higher Education, Mr Willetts warns against a £6,000 policy and tells Mr Byrne to “resist its lure”.

Mr Byrne, often viewed as being on the right of the party, is understood to be keen to counter the impression that he is less than enthusiastic about a policy to lower fees, usually associated with Mr Miliband, and to stress that he is pushing to lower costs for students.

He was asked about Labour’s plans by vice-chancellors when he spoke at a behind-closed-doors meeting at the Universities UK conference on 11 September.

Vice-chancellors present at the meeting said that Mr Byrne had told them that Labour would not announce its policy until there was clear agreement within the party about how it would make good the funding shortfall for universities created by cutting fees from £9,000.

One vice-chancellor said Mr Byrne had told the meeting he recognised that the unit of resource, which he put at £9,000 per student, could not be reduced.

During the meeting, Sir Alan Langlands, vice-chancellor at the University of Leeds and former chief executive of the Higher Education Funding Council for England, is understood to have told Mr Byrne that at his institution alone, 18,000 home undergraduates on £6,000 fees would create a shortfall of £54 million compared with the present £9,000 system.

Sir Alan is said to have asked the shadow minister what he would do in government to make up the sector’s shortfall if Danny Alexander, the current chief secretary to the Treasury, “left a note saying there’s no money left”. That was a mischievous reference to the note left by Mr Byrne as outgoing chief secretary to the Treasury when Labour handed over to the coalition in 2010.

Measures being considered by Labour to fund a £6,000 policy are understood to include asking higher-earning graduates to pay bigger interest rates on their loans and making them continue repayments for a period even if they settle their debt early.

Lowering fees to £6,000 would also mean lower write-offs on student loans – delivering savings that could contribute to higher direct funding for universities, the party believes.

But Mr Willetts says in his letter that the write-off cost “is not real money that is being spent and that can be diverted to another purpose”.

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