Think-tank calls for cap on tuition fees to be scrapped

But cost of freedom would be all direct government funding for teaching, writes Melanie Newman

November 27, 2008

The cap on student tuition fees should be scrapped, the think-tank Reform recommended this week.

But in exchange for this greater freedom, universities would lose all direct government funding for teaching.

All higher and further education funding would be market-based, with the £9.6 billion budget for post-18 education reallocated over five years to Individual Education Accounts, the report, The Mobile Economy, says. These would give each 18-year-old £13,000 to spend on education, training or apprenticeships.

The think-tank believes British universities should be given "independent decision-making over fees, student numbers, curriculum and staffing and capital investment".

This means: allowing universities to set their own salaries with the end of national pay bargaining; giving them the freedom to design courses by abolishing the Quality Assurance Agency; ending subsidies for expensive courses and removing the power of the Higher Education Funding Council for England (Hefce) to set student numbers, as well removing the tuition fees cap.

Hefce limits on student numbers are particularly damaging, Reform says, as they give popular institutions an incentive to raise prices rather than "increase sales". This "places them in a comfort zone in which they don't have to think entrepreneurially". Meanwhile, unpopular and more expensive courses are given an "artificial boost".

While the National Union of Students and the University and College Union have argued that higher tuition fees deter potential students, Reform says that countries charging the highest fees have the highest participation rates, and argues that greater individual contributions result in "more rational decision-making" by students.

Wes Streeting, the NUS president, said: "Against the current economic backdrop, it would be extremely foolish to trust the provision of any major public service entirely to the market. These proposals would put the long-term security of thousands of vital courses serving our most deprived communities in jeopardy. They would confine the vast majority to a utilitarian education system based on weighing up financial risk."

David Willetts, Shadow Universities Secretary, agreed with the "wish to empower the individual". But he said the Individual Education Accounts made no provision for mature students and added: "Given the disparity of costs between subjects - a degree in engineering costs so much more than a theology course - it's hard to see how giving everyone a standard sum of money would work."

Wendy Piatt, director-general of the Russell Group of research-intensive institutions, said: "The most successful universities are those that are allowed to operate independently."

She said the group was not advocating any policy on tuition fees until it had completed a review of funding regimes across the world.

Proposal to end to Welsh Discount scheme

The blanket discount on top-up fees for Welsh students studying in Wales should be scrapped in favour of more help for the poorest students and subsidised loans, a task force for the Welsh Assembly Government has recommended.

Welsh students in Welsh universities receive a flat-rate tuition grant, meaning that they pay £1,200 in fees instead of the maximum £3,145 charged in England.

But the task force, led by Merfyn Jones, vice-chancellor of Bangor University, said the annual £61 million cost of the scheme would be better spent on means-tested support and investment in higher education. It proposed scrapping the flat-rate grant from 2010-11.

An announcement from the Welsh Assembly was expected as Times Higher Education went to press.

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