Sharing information on fees 'might be illegal', says UUK

Institutions are warned over price-setting as MPs are asked to investigate. Simon Baker reports

April 21, 2011

Universities in England setting their undergraduate tuition fees for 2012-13 could be breaking competition law simply by sharing information on costs or other "strategically significant matters", such as support for poorer students.

The warning comes in a briefing by Universities UK on the latest legal advice about the issue, as scrutiny intensifies over the decision by a large number of English institutions to aim for the maximum level of £9,000.

The document - part of which has been seen by Times Higher Education - advises universities to "consider very carefully...the sharing of information, and the nature of the discussions they are able to have with colleagues from other institutions".

Anything that allows another university to "infer or deduce a pricing or commercial strategy" could be deemed commercially sensitive, according to the briefing, including "financial projections, proposed programme expansion or reduction, and benchmarking".

Fears over the potential for an Office of Fair Trading investigation into price-setting by universities have been heightened after a union official called on MPs to look into whether institutions were guilty of collusion.

Mike Robinson, national officer for higher education at Unite, told a hearing of the Business, Innovation and Skills Committee this month that there was "anecdotal evidence" that sensitive information was being shared. He said Unite was looking closely at institutions that had not been "very transparent" about how fees were being agreed.

There is a precedent for education providers being subject to investigation. In 2006, the OFT found that an agreement between 50 of the UK's fee-paying independent schools to exchange detailed price information was in breach of competition law.

Whether the higher education sector comes under the remit of the legislation has been the matter of some debate, but THE understands that UUK has received legal guidance that the rise in the fee cap means universities could now be covered by price-setting rules.

However, one lawyer said the fact that the market was capped, that the government has set the framework and that many universities have now publicly declared their plans throws doubt on whether competition law could be applied.

Paul Clark, director of policy at UUK, said the briefing, which has been circulated among members, was deliberately cautious because of the uncertainty of the situation.

"It is not just about price discussions, it is about whether information on other things like costs or fee waivers are also being discussed, as these also could come into play," he said.

"People in universities are used to discussing things formally and informally and now they have to be extremely careful."

An OFT spokesman said that to launch a formal investigation it must have "reasonable evidence" of collusion, as "similar prices alone are not an evidence of a breach".

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