Drive to cut English fee cap raises questions on DfE stance

A renewed drive to cut tuition fees at English universities to £7,500 has raised questions about whether the Department for Education (DfE) supports the Treasury in using a lower cap to reduce the outlay on student loans and pressure institutions to focus on courses deemed to provide higher earnings.

If the government were to provide replacement top-up funding only for courses in its priority fields, such as science, technology and healthcare, it could have huge ramifications for some universities’ ability or appetite to offer arts, humanities and social sciences courses.

Sector figures expect a consultation covering fees and funding in early June, alongside consultation on a minimum entry requirement for universities and changes to student loans terms and conditions – two other potential cost-cutting measures the government mentioned in its January interim response to the Augar review of post-18 education.

The Augar review’s report, published in May 2019 under the Theresa May government, recommended lowering tuition fees from £9,250 a year to £7,500, with replacement public funding targeted at subjects that cost more to teach and have greater “social and economic value”.

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The Boris Johnson government long appeared cool on that proposal, but the tide seems to have turned. One figure with knowledge of education policymaking said it would be “a big surprise if it [a fee cut] didn’t happen”.

Another sector source suggested that the DfE was opposed to a fee cut, fearing that it could result in financial collapse at some universities. But others think key figures in the department are very open to a fee cut.

Jack Britton, an associate director of the Institute for Fiscal Studies, said his “educated guess” would be that the Treasury “is looking at the earnings data and thinking it is not getting good return on investment for some subject areas, and so it wants to squeeze them”.

Jonathan Simons, head of education practice at the consultancy Public First, said the DfE “will want to secure enough funding in the spending review to support an increase in tertiary provision overall”. “But frustratingly for them, the fact that the pot for FE and the pot for HE sit within the same departmental budget means that they are at risk of having one bit cut to pay for another,” he said.

Andy Westwood, professor of government practice at the University of Manchester, said that rather than seeking a fee cut to shrink loan outlay, “the big shift that DfE and HMT [Treasury] are probably much keener on” is “being able to direct more additional funds to their own priorities – institutions, courses or places”.

“This isn’t a government that wants to leave all outcomes to markets or to individual choices…So I definitely think it [a fee cut] is on the table,” he added.

But Graham Galbraith, vice-chancellor of the University of Portsmouth, said he was “very concerned that broad-brush assumptions are being made around the value of higher education to individuals and our nation based on little evidence”, arguing that it was “so important that young people who make a large investment in their own education have the opportunity to choose to study subjects that they are good at, motivated by and which grow their broad skills as individuals”.

“Judgements about the opportunities that should be available to young people based only on the cost to the Treasury or the earnings that follow from studying different subjects do not capture this complex set of benefits,” he said.

john.morgan@timeshighereducation.com