Government considered £5,000 fee

March 25, 2005

The Government looked at rapidly increasing the level of top-up fees in a series of annual hikes that would have taken them to £5,000 a year, according to a previously restricted document released this week under the Freedom of Information Act.

The document, released to The Times Higher , shows that the Government seriously considered increasing the flat-rate fee by £1,000 a year over four years to a maximum of £5,000.

The modelling was completed two months before the Government published its White Paper, in early 2003, announcing fees of £3,000. The document shows that fees of £5,000 a year would raise twice as much for higher education as a £3,000 charge.

The document, which is dated November 2002, also reveals that ministers planned to charge interest on student loans. Two months later the White Paper rejected such charges.

Charles Hendry, the Conservative Party's higher education spokesman, said: "If it had been made public that the Government was actually thinking of Pounds 5,000 fees at the time the House of Commons voted on top-up fees, I'm sure it would not have voted in favour. It explains why a lot of university vice-chancellors have got the impression that the £3,000 fee is just a first phase and they are expecting to be allowed to charge much larger amounts in years to come."

The document was initially wrongly withheld from The Times Higher by Peter Swift, deputy director of student financial policy at the Department for Education and Skills, after a request under the new Act.

The Times Higher , which had asked for all "assessments" made of the potential impact of any fee caps other than the £3,000, was told that "no detailed assessments were made" of any alternatives.

This week, the document was released after a month-long internal review of Mr Swift's decision by Ruth Thompson, the DFES director of higher education strategy.

The document, marked "restricted - policy" and headed Variable Fees: Modelling Results , says: "This paper sets out the first run of modelling results on the variable-fees proposal."

It explains that under the model being examined, institutions would vary their fees, charging any amount so long as it was beneath a cap. "The cap is raised annually (£1,000 instalments) until it reaches £5,000 and rises in line with earnings thereafter."

The document shows that if all universities charged the full £5,000 fee when allowed to do so, the sector would raise an additional £3.5 billion, compared with £1.7 billion raised by a £3,000 fee.

The plans would include merging a new maintenance grant with the existing grant, currently used to waive or reduce tuition fees for poor students.

Students could defer their fees by "adding it to their student loan instead".

In a nod towards interest rates, the document says that to ensure that deferring fees would not be at the Government's expense, "costs have to be passed on to the student or shared with the institution".

David Rendel, higher education spokesman for the Liberal Democrats, said:

"We have always suspected there was division in the Cabinet about fee levels, and it looks like the Chancellor put his foot down at the last minute and insisted on a £3,000 fee instead of a £5,000 fee."

Many vice-chancellors have argued that £3,000 will be insufficient to create a proper market with price differentiation and have suggested that £5,000 would have allowed variability. All but three universities are to charge the maximum £3,000.

The Treasury refused to release any documentation on alternative fee levels, arguing that the release was not in the public interest. The refusal is subject to an appeal by The Times Higher .

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