Price deterrent

October 3, 1997

Huw Richards reports from the fringe meetings at the Labour party conference in Brighton

Between 40,000 and 50,000 potential undergraduates are likely to be deterred from seeking university places next year if the government's tuition fee and maintenance grant reforms go ahead, a vice chancellor warned this week.

Brian Roper, vice chancellor of the University of London, made the prediction at a Labour Party conference fringe meeting in Brighton. Professor Roper, an economist, said afterwards that his estimate was based on an analysis of the likely price elasticity of demand for student places. He said the decisive element was not the actual cost of taking up a place, but perceptions of it.

"The government has to ask if there is any good or service for which you can increase demand by upping the apparent price. Economists call them Giffen goods, but they don't exist much in real life," Professor Roper said.

He predicts that the first institutions to suffer from falling demand will be those, like his own, with a high proportion of mature, working-class and ethnic minority students. But the real, medium-term victims as costs rise and students increasingly choose to study closer to home, will be older greenfield universities isolated from the main urban areas.

MP Ken Livingstone said he thought his open opposition to funding changes had contributed to his election to Labour's National Executive Committee ahead of leadership choice Peter Mandelson. He said higher education's cash dilemma could be solved if the government raised taxes.

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