Another English funding review ‘inevitable’ after fees freeze

V-cs increasingly predict next government will have to look again at sector funding as costs rise and universities face ‘running on fumes’

四月 13, 2022
Trapped in the mud, Bosham harbour,  Sussex, UK to illustrate English HE braces for funding review
Source: Alamy

Vice-chancellors are increasingly predicting that freezing university income at a time of rising costs makes yet another review of English higher education funding “inevitable”, as institutions face the prospect of “running on fumes”.

The government’s recent, much-delayed response to the Augar review of post-18 education included the announcement of a further two-year freeze of the tuition fee cap at £9,250 – amounting to a freeze of at least seven years in total.

Meanwhile, universities face big increases in their costs at a time of rising inflation, including via energy bills.

Sir David Bell, the University of Sunderland vice-chancellor and former Department for Education permanent secretary, said Sunderland’s “cost of standing still” – paying for “current operations without a pound allocated to new staff or initiatives” – was “approaching £10 million” for 2022-23.

“While the number will be different from institution to institution, this is the situation that we all face,” he added.

He said a future review of higher education funding was “inevitable unless the government – and any future government – is banking on a significantly reduced higher education sector”, in terms of student numbers and student experience.

“That may be a policy choice, but it doesn’t seem to be the articulated aspiration of either the Conservative or Labour parties,” Sir David said.

James Purnell, the University of the Arts London vice-chancellor, a former Labour Cabinet minister and architect of Tony Blair’s 50 per cent higher education participation target, highlighted the fact that the government’s student finance changes mean a heavier burden of loan repayments for the “lower to middle third of graduates”.

“That doesn’t feel to me like a stable system in the long run” and “there is now a debate between now and 2025” on investment, he added.

“I think that at that point with everything we know about the UK being a knowledge economy, I think there will be a very strong case to make that that [investment in post-18 education] now needs to start going up rather than being frozen,” said Mr Purnell, who remains a supporter of tuition fees.

However, others in the sector may see a chance to push ideas for a graduate tax to Labour, particularly after the government extended the loan repayment term from 30 to 40 years.

Lord Willetts, the Conservative former universities minister, argued against the idea of a review. “We’ve had a big review, the Augar review, which has shown there is no big attractive alternative [to fees]. What will need to happen in due course is for fee levels to start rising again…The sector doesn’t need to start suddenly trying to redesign the HE funding system,” he said.

Others questioned whether a Tory or Labour government would have the appetite to raise fees – certain to be an unpopular measure with the public – high enough to address universities’ cost pressures, without rationale from a review.

Sir Chris Husbands, the Sheffield Hallam University vice-chancellor, said: “I just think the politics will always be difficult on a fee increase, and yet the sector is going to look pretty threadbare in 2030 if £9,250 is fixed for another Parliament. 

“I would put my money on there being some sort of review – almost whoever wins the election, actually. A review turns – or appears to turn – a difficult political question into a technical one.”

Sir David said: “Maybe not next year but certainly beyond, there is genuine risk that we start to run on fumes. What an irony after Augar was supposed to be a new settlement and put the English higher education system on a more sustainable footing for both students and universities.”


Print headline: English HE braces for funding review



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Reader's comments (1)

The existing funding sytem is no longer appropriate, as it is totally divorced from the costs of delivering undergraduate degrees for different courses at different institutions. There is no market in the sector as long as there is the same £9250 payment for every course at every university. Fixed fees are mad. Markets cannot operate without dynamic pricing. Using cross subsidies from research funding and other income is stupid as it hides the real situation. No one would ever pay the same price for a one litre Seat and a four litre BMW. They may both be a car but they are not the same thing and neither is a degree in business administration and a degree in astro physics the same thing. Most Universities now deliver "work skills" rather than "education, learning and thinking". The Government seems to want to support the courses and institutions that result in the highest incomes for their graduates yet refuses to link costs to outcomes. If studying medicine or engineering is a good way to getting a high income then clearly pay more to get more of both from those institutions who can increase output for the lowest costs (that at least covers the cost of delivery and an allowance for future investment). There is no need for a graduate tax either. Normal progressive taxation can catch those who earn the highest incomes after their degrees. On a related point, integrating University under graduate degrees with level 5 and above Apprenticeship, will be almost impossible when the system of payment for delivering the apprenticeship (involving heavily on the cost of delivery) is totally different from the fixed price for any undergraduate degree.