PM May announces ‘major review’ of English university funding

Conference speech raises questions about future of £9,250 fees system and shows impact of Labour policy

October 4, 2017
Theresa May

The UK’s prime minister has announced a “major review of university funding and student finance” in England.

Theresa May unveiled the plan during her speech at the Conservative conference in Manchester on 4 October, following intense speculation since the weekend, when several newspapers were briefed that there would be a review.

The announcement will raise questions about the future of the £9,250 funding system.

The review appears to come very much from Ms May and No 10, who are concerned about the popularity of Jeremy Corbyn and Labour’s appeal to young voters – including through their policy to abolish fees.

Analysis: what the review might mean for England's universities

The Department for Education and Jo Johnson, the universities and science minister, are thought to have strongly resisted the idea of a major review.

Ms May did not offer any clarity on whether the exercise would be an external review – in which case the selection of a chair and terms of reference will be key issues – or an internal government exercise.

However, her use of the phrase “major review” may be taken as an indication that she wishes to see an external review, or a review that paves the way to significant changes to the status quo.

She framed her announcement as an attempt to ensure that the “British dream” of a bright future remained in place for young people.

“But today, young people take on a huge amount of debt to do so and if we are honest, some don’t know what they get from it in return,” she said. “So we have listened and we have learned. So we will undertake a major review of university funding and student financing. We will scrap the increase in fees that was due next year and freeze the maximum rate while the review takes place.

“And we will increase the amount graduates can earn before they start repaying their fees to £25,000, putting money back into the pockets of graduates with high levels of debt."

HE sector reacts to Theresa May’s announcement 

Janet Beer, president of Universities UK and vice-chancellor of the University of Liverpool

“The government is right to look at ways of improving the current student funding system in England, but it is important that they do not ‘throw out the baby with the bathwater’ in an attempt to find a quick, political solution. There are many positive elements to the current system that should not simply be swept aside.

“The current system provides sustainable funding for universities and the skilled graduates our economy needs. It has also seen record numbers of students from disadvantaged backgrounds entering university. But we agree that it needs to be better understood and needs to feel fairer to our students and their families. We’re pleased the government is looking at ways of addressing students’ money concerns and we welcome the plan to raise the loan repayment threshold.

"We hope this will mean reduced interest rates for low and medium earners. Universities UK would like to see the government going further by reintroducing targeted maintenance grants for those most in need. Any review would also need to do more to reverse the worrying decline in the numbers of part-time and mature students. We have a world class reputation for university teaching, but it is important that this is funded sustainably. As the IFS said this week, freezing the cap on tuition fees, with no compensating grants, directly reduces university funding. If kept in place, this would risk universities' ability to provide students with the world-class education they rightly expect.”


Tim Bradshaw, acting director of the Russell Group

“Funding levels are linked directly to the ability of universities to provide a high-quality learning experience for students. The current system has allowed our members to invest £1.85 billion over the past five years in new facilities that are benefitting students starting their courses this autumn. They have boosted spending on teaching staff and resources and are helping more young people than ever before access higher education. We need a university funding system that is sustainable. One that is fair to students, to the taxpayer and to universities. The UK needs to be ambitious in continuing to develop its world-class higher education offer and so we look forward to engaging fully with the review announced by the Prime Minister this afternoon.”

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