OFT warns against price-fixing

March 7, 2003

Universities that discuss common fee levels could be in breach of the 1998 Competition Act, the Office of Fair Trading warned this week.

"If universities are discussing common fee levels, that is very worrying," said an OFT spokesperson. "Universities may be naive about the Competition Act legislation that comes down very hard if there is any evidence of price-fixing agreements."

Last week education secretary Charles Clarke hinted that he might turn to the OFT if all universities charged the top fee of £3,000 in 2006 and if there were evidence of price-fixing.

The OFT has not yet received any letters of complaint about future fees.

The spokesperson said: "In the case of such a complaint the office would need evidence of collusion. We might ask a university about its pricing structure."

Kirsten Gillingham, director of finance at Brighton University, has been researching the implications of the 1998 act in light of last month's white paper.

She said: "The white paper talks of higher education as a market, in which case the act could apply. However, universities could argue that a low and capped fee does not create a market."

She said that a debate was needed so that universities were clear about their legal position.

Ms Gillingham, who has experience of working in the local government and health sectors, said: "An OFT inquiry into university fee setting combined with the costing and pricing strategies set out in the transparency review could become major bureaucratic hurdles for universities - yet another hard-edged party to come and beat us over the head."

She said that the OFT was looking at the terms of tenancy agreements for students at Brighton.

A spokesperson for Universities UK said it "will be taking professional advice on this and will be conveying this to members".

• Oxford University's Congregation has been called for the first time in over a year to debate a motion that opposes the introduction of top-up fees.


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