Oxbridge fears college fee crisis

October 3, 1997

Higher education: Many elite institutions want students to pay more to offset funding cuts

OXBRIDGE colleges will ask students to make up cash shortfalls if the Government ceases to pay college fees, their managers warned this week.

The colleges say it would be the only way of avoiding going under and argue that they should be exempt from any Government move to ban top-up fees.

George Reid, chairman of the fee committee at Cambridge University, said: "We aren't seeking top-up fees but we are looking to maintain the status quo. If there is legislation to prohibit top-up fees then it seems to me we have to be very careful that college fees aren't brought within that."

Ruth Deech, principal of St Anne's College, Oxford, said: "If college fees are taken away it would undermine the national interest in preserving and extending the world-class research and teaching institutions which we have. It takes hundreds of years to build up a reputation and is quite easy to destroy it."

If college fees ceased to be paid by government and colleges were unable to charge their own, she said, some would have to become research-only institutions, others would collapse.

The college fee is worth about Pounds 17 million per year to Oxford and Cambridge, once deductions from their funding council grants are taken into account.

Sir Ron Dearing's report recommended that variations in the level of public funding for teaching should occur only when there was approved difference in provision and where society believed it represented a good use of resources.

Soon after the report was published, officials from the Department for Education and Employment wrote to the funding councils asking their advice on future Oxbridge funding "having regard both to the points raised in the inquiry's report and the funding councils' new funding method for teaching". This new funding method is based on the aim that similar activities should attract similar resources.

The DFEE has asked for a reply by November.

Frantic meetings are now taking place in the two universities, although bursars and principals say they still lack information. For example, it is not clear what would happen to the college fee supplement now paid By overseas and postgraduate students. Any radical change to arrangements for next year must be decided quickly because it would involve altering mechanisms for fee collection.

Poorer Oxbridge colleges such as Pembroke and Fitzwilliam are particularly worried.

The University of Durham, which was paid a special college fee until last year, may also be affected by any change. The fee is now absorbed into its main grant from the Higher Education Funding Council, which is about 1 per cent below the average level of funding. The university argues that without this fee it would be too far below the average. In addition, three of Durham's colleges are independent and are still paid the fee separately. They claim they could suffer financial collapse without it.

Top research institutions say the Dearing report clearly supported a variety of provision in higher education. But the announcement by education secretary David Blunkett of an extra Pounds 125 million for universities next year left many cold.

"It's a pittance," said a Cambridge university spokesman. "Dearing identified a funding gap of Pounds 350 million and it's only a third of that. Then there's a huge question mark over what's happening to tuition money in the future."

While the London School of Economics has now ruled out charging top-up fees for the foreseeable future, it has spent much of the past year involved in vigorous fund-raising campaigns.

Anthony Giddens, its new director, said he could envisage top institutions relying far more on endowments and donations, like those in the United States, although this would depend on Britain developing the same tradition of donating to higher education.

With its strong international reputation, the LSE also benefits from income from overseas fee-paying students. Over the past ten years, this has provided a quarter of its income. The proportion of British students has fallen to under half.

Elsewhere, there is also a reluctance to rely on too many foreign students. Ruth Deech says it could change the atmosphere of an institution, which, in turn may deter foreign students from applying.

One university relatively sanguine about the post-Dearing picture is Warwick, which raises about half its income from its own business ventures.

It is a route many others are likely to explore in future.

Oxford University

Annual overall income: Pounds 351.2 million (of which Pounds 79 million is college income)

Home fees: 6 per cent

Block grant: 24 per cent

Research income: 29.8 per cent

College fees: 10.8 per cent

Endowments: 16.5 per cent

Overseas student fees: 3.9 per cent

Other income: 8.7 per cent (includes Pounds 7.8 million from services and Pounds 7.3 million from benefactors and donations)

Overall financial position: The university has net assets of Pounds 57 million and long-term liabilities of Pounds 18 million.

New projects: It is continually trying to develop additional sources of funds, for example by increasing income from research grants and contracts and technology transfer and by fund-raising.

Top-up fees? "We have no plans to charge top-up fees, though our prospectus has included a note to the effect that the fee regime could change post-Dearing."

On Dearing: The university will shortly publish its comments on the report. In general it warmly welcomes the report's view on the importance of higher education and lifelong learning in the life and prosperity of the nation. It particularly welcomes the emphasis on access and quality and the need for more resources if these are to be sustained. It strongly endorses the view taken by the committee of the importance of institutional diversity but is concerned that measures flowing from the implementation of the report could lead to increasing and undesirable uniformity.

Pembroke College, Oxford

Robert Stevens, master of Pembroke College, Oxford has been citing the example of United States private universities as a possible way out for elite institutions in this country.

He argues that this would force universities to respond to long-term needs and would allow them to be more independent, giving them more influence on public analysis.

His college is one of the poorer institutions in Oxford, with fewer assets and endowments than many others.

Its overall annual income amounts to about Pounds 2.8 million, of which 49 per cent - Pounds 1.37 million - comes from fees. About 18 per cent of this fee income is from overseas students. Endowments provide 16 per cent while 24 per cent comes from charges to students, including rents, meals and services. Conference income provides the remaining 11 per cent.

Cambridge University

Annual overall income: Pounds 392.1 million (of which Pounds 125 million is college income) Home fees: 4.7 per cent

Block grant: 22 per cent

Research income: 21.8 per cent

College fees: 8.9 per cent

Endowments: 20 per cent

Overseas student fees: 3.5 per cent

Other income: 19 per cent (includes Pounds 11.2 from donations and Pounds 40 million college income)

Overall financial position: Forecasting increasing deficits to 2000/2001 based on reduction in public funding.

New projects: Research funding is increasing annually and contacts with industry such as Rolls Royce, Zeneca, Glaxo Wellcome and Hitachi, provide extra funding for expansion. More than half of the university's research income comes from non-government sources.

Top-up fees? The university reserves its right to charge appropriately to ensure that its high quality is maintained.

"We are naturally concerned at the recent public discussion about college fees. Cambridge maintains a position of international excellence. This is a system that depends on an element of additional public funding, which we believe provides excellent value for money and proven academic results."

Fitzwilliam College, Cambridge

Fitzwilliam College was set up in the 19th century to offer a Cambridge education to students without the expense of college fees. It only officially became a Cambridge college in 1966. It feels particularly vulnerable to any abolition of college fees because it has a low level of endowments and a high state school intake.

Christopher Pratt, the college bursar, said: "If we were to survive at all, we would survive in a completely different form. There would have to be major cuts in teaching staff and we wouldn't be able to continue to offer the full range of subjects any more."

The college's overall annual income is Pounds 3.34 million. Just over 40 per cent of this comes from fees, including Pounds 88,000 from foreign students.

Endowments provide 12 per cent, student rents 18 per cent, catering 16 per cent, conferences 12 per cent and miscellaneous 1 per cent.

If the government no longer supported college fees, Fitzwilliam would lose 60 per cent of its fee income - about Pounds 800 per year or almost a quarter of its total income.

Warwick University

Annual overall income: Pounds 140 million

Home fees: 7.5 per cent

Block grant: 30.7 per cent

Research income: roughly 15 per cent

College fees: None

Endowments: under 1 per cent

Overseas student fees: 5.6 per cent

Other income: 40 per cent (largely from links with industry, conference trade, management training)

Overall financial position: The university has about Pounds 21 million worth of borrowings - below the sector average - and is financially very confident. It carried out Pounds 35 million worth of building work over the past year and a half, almost entirely paid for through business income.

Latest projects include a new link between its MBA course and Arthur Andersen, worth Pounds 500,000 a year.

Top-up fees: The university has no plans to charge top-up fees.

"The recent Dearing report reveals that even next year the gap in funding is Pounds 350 million and by 2016 higher education has a funding gap of Pounds 2 billion. By announcing the intention to raise new funds through a fee payable by full-time undergraduates, this government has taken a brave and bold decision which may just allow us to safeguard an important national asset."

London School of Economics

Amid the stormy discussions taking place at the Committee of Vice Chancellors and Principals' annual conference last month, one voice was conspicuously absent.

After being one of the noisiest advocates of the top-up-fee threat that helped prompt Sir Ron Dearing's report, the London School of Economics was nowhere to be seen. It seems that all likely LSE conference-goers had pressing reasons to be elsewhere.

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