Low fees may win extra Hefce cash

March 14, 2003

Universities that charge bargain-basement tuition fees could get extra cash in an attempt to avert a fall in quality.

The Higher Education Funding Council for England is to consult about giving "consideration to the possible consequences of the decision to allow institutions to charge variable fees from 2006-07".

The consultation, which will take place later this year as part of the funding council's review of teaching funding, is announced in today's strategic plan for 2003-08.

Sir Howard Newby, chief executive of Hefce, said: "A student in any particular subject attracts the same unit of resource no matter what institution they are in. As we go down the differential fees route, that won't last. The question is: should we or should we not take that into account?

"In favour of what we have now is the moral imperative that students receive the same level of resourcing to support teaching and learning, and that ensures that the quality of the student experience doesn't fall outside certain parameters.

"What's in favour of not taking into account (the possible consequences of allowing institutions to charge variable tuition fees from autumn 2006) is that the white paper wants to take a greater degree of market forces into account. We would be undermining the whole proposed government reforms.

Eventually, we will have to come to a view on this.

"There's an argument that an institution that was charging too low a fee would actually jeopardise standards. Can an institution provide a minimum on Hefce funding without charging a fee? I think that's highly unlikely. If institutions were going to drive down the fee, then we would begin to have concerns about quality."

The funding council is forbidden from taking into account an institution's other sources of funding when it allocates public funding.

A change to this would require legislation and would be highly unlikely, given that it would go against the intentions expressed in January's white paper.

Concerns about the quality of courses surfaced most recently during the rapid expansion of higher education in the early 1990s. Much of this expansion occurred at marginal cost. Subsequent concerns led to the creation of the Quality Assurance Agency in 1997.

Sir Howard said that he expected between two-thirds and three-quarters of universities to charge the full £3,000 fee.

His prediction raises the possibility of a more rigorous inspection regime for up to 50 institutions.

The funding council is already planning to simulate the likely outcome of institutions charging variable fees.

Sir Howard suggested that such computer modelling would be complicated as some institutions may "come together to seek shelter in the market".

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