Grants may be key to success

December 5, 2003

A package of New Year concessions on the higher education bill could see student maintenance grants raised but the government promised no retreat on variable charges this week.

Publication of the bill, due on Wednesday, has been postponed and will now go ahead soon after the Commons returns on January 5.

The government is considering a number of concessions on student funding to win over Labour backbenchers threatening to vote against the legislation, which will receive its second reading before the end of January.

But it is unlikely to budge an inch on the principle that fees should vary by institution and by course. The MPs' vote on the second reading will be the acid test of whether the government has moved far enough.

Russell Group vice-chancellors were due to meet education secretary Charles Clarke and higher education minister Alan Johnson this week. They plan to push for an increase in maintenance grants. The move was backed by the Coalition of Modern Universities.

Mr Clarke told the Today programme on Wednesday: "We are prepared to consider [an increase in the maintenance grant]. The biggest concern for my colleagues in parliament is ensuring students from the poorest backgrounds can go to the universities where the fees are the highest."

Prime minister Tony Blair is optimistic that rebels can be persuaded before the Christmas recess and reiterated his commitment to variable tuition fees at a press conference on Tuesday.

Mr Blair said: "If you look beneath the opposition to fees, some of it is opposition to the whole principle of charging tuition fees but a lot of it is due to variation of fees and that's where a lot of people can be persuaded. The issue is: should there be a variable fee and how much should it be? And that's something we can discuss."

Mr Johnson said in evidence to the Commons education select committee on Wednesday: "I don't think fixed-rate fees would work (if the fee were to rise) above £3,000. I think that should be matched with a recognition that not every course is the same."

He said universities could use fees from courses that were cheap to run to subsidise expensive courses. "There's a racing certainty that chemistry and physics, where they have high infrastructure costs but they don't have the volume, will charge nothing, or next to nothing, and cross-subsidise with students from law. I don't see anything wrong with that at all," he said.

Russell Group vice-chancellors are expected to suggest that the means-tested fee waiver, currently £1,125, would be better added to the grants available to cover the living costs of poor students. They say that this would separate fees from grants and give more money to poor students when they need it most.

Mike Sterling, vice-chancellor of the University of Birmingham and chairman of the Russell Group, said: "Variable fees are essential to this package.

If flat-rate fees win the day, all of higher education will be condemned to mediocrity. The way to break the deadlock is to improve maintenance grants.

I welcome the fact that the prime minister has made this a central plank of the reform."

Michael Driscoll, vice-chancellor of Middlesex University and chairman of the CMU, said: "The student funding proposals are not a perfect package. If it takes a delay to get them right, then so be it."

Mr Clarke and Mr Johnson have called three meetings with backbench MPs before Christmas in response to the early-day motion signed by some 150 rebel Labour MPs calling for informed debate. Barry Sheerman, chairman of the Commons education select committee, is leading a series of seminars for Labour MPs.

Costing the concessions

The government has indicated that it is willing to make a number of concessions on student funding to win over Labour backbenchers to the delayed higher education bill.

Q: What is the cost of delaying the point at which students start paying back the cost of the fees from the current threshold of £15,000 to £20,000?
A: More than £350 million a year.
Source: IFS

Q: What would be the cost of abolishing upfront fees of £1,125 a year before replacing them with top-up fees?
A: Around £170 million a year.
Source: IFS

Q: What would be the cost of increasing the maintenance grant to £1,750 to poor students.
A: Around £225 million a year.

Q: What would be saved by abolishing the fee-waiver and amalgamating this saving with current access funds distributed through universities and all current discretionary grants.
A: About £825 million a year.

Q: What could this fund?
A: Maintenance grants of £2,400 for 40 per cent of students for whom full fees are currently paid.
Source: David Watson, vice-chancellor, Brighton University

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