Perks on offer to lure students

April 23, 2004

Universities will compete for students through bursaries and perks rather than varying tuition charges when top-up fees are introduced, academic chiefs predicted this week.

Vice-chancellors told The Times Higher that they expected the vast majority of old and new universities to fix fees for all degree courses at the maximum of £3,000 a year from 2006.

The plans suggest that MPs' fears that the variability of fees would create a two-tier system are unfounded. But they come amid official warnings that institutions face financial ruin if they make mistaken judgements about their position in the emerging higher education marketplace.

Coventry University revealed it had considered offering perks such as laptop computers, free meals and sports club membership alongside financial support but had decided money would be better spent on campus facilities for all students.

However, Simon Hackwell, head of the higher education advisory team at consultants KPMG, said a number of institutions were carrying out market research to "get a better understanding of what makes people choose and, as importantly, not choose to go to that institution".

"Innovation is going to come in the form of bursaries, scholarships and support," Mr Hackwell said. "There's no doubt that a number of institutions are thinking about developing packages: something with a bursary scheme and an added-value aspect about accommodation, IT facilities and sports and leisure - although the thinking in that area is not all that developed yet."

Birmingham, Bournemouth, Durham, Kingston and Leicester universities have already decided in principle or are "working on the assumption" that they will charge the maximum £3,000 from 2006. They are also still working on the details of their student support schemes.

Other universities - including Cambridge, Imperial, Exeter, Surrey and Royal Holloway, University of London - have announced that they will offer bursaries of up to £4,000 a year.

Nevertheless, some institutions told The Times Higher that they were still weighing up options and said it was too soon to rule out variations in fees.

Simon Lee, vice-chancellor of Leeds Metropolitan University, said: "My personal instinct is that if [the government's] plan goes ahead - however much we might regret it - then we should compete on quality, student service, distinctiveness, added value, value for money and price."

Michael Driscoll, vice-chancellor of Middlesex University and chairman of Campaigning for Mainstream Universities, said he would be "extremely surprised" if institutions competed on the level of fees.

He said that most universities would seek to maximise their upfront income from the Treasury by setting a £3,000 fee. He said it would make "no sense whatsoever" to charge a lower fee.

Professor Driscoll added: "The competition, if there is any, will be over implicit pricing, in other words, over the size of bursaries.

"If you want to do the best for students and give them big bursaries, you need to charge the maximum fee."

Michael Sterling, vice-chancellor of Birmingham and chairman of the Russell Group, said that his institution had last year decided in principle to set a £3,000 fee for all courses because of "strong market demand and high-quality courses", but a final decision would be made in July.

"I can't speak for the other universities because they will each go through their own approval process, but I would be surprised if most Russell Group universities didn't come to the same conclusion," Professor Sterling said.

The Department for Education and Skills said it was "premature" to think all universities would charge £3,000 and that the government had no intention of "second-guessing" universities.

The principle of variable tuition fees has been bitterly contested by MPs and prompted a rebellion of 57 Labour backbenchers during the third reading of the higher education bill before Easter.

Sir Howard Newby, chief executive of the Higher Education Funding Council for England, will this week warn university heads that mistaken judgements in future competition for students "could have serious implications for the financial health of institutions". Speaking at the council's annual conference, Sir Howard will explore Hefce's role in the marketplace.

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