Treasury opposition to increasing direct public spending on English universities could block the recommendations of the country’s review of post-18 education.
Times Higher Education understands that the review panel’s report calls for tuition fees to be cut to £7,500, but with the lost fee income being fully replaced via direct public spending to maintain present levels of funding at an average of £9,250 per student, under a model that would shift funding towards high-cost subjects.
However, Philip Hammond, the chancellor, and the Treasury are unhappy with the recommendation from the review panel – led by Philip Augar – to introduce extra direct public funding for universities, Westminster sources told THE.
One suggested that the panel report was being “blocked” by the Treasury and that when the report is published, it will be accompanied by alternative points of view from sections of the government.
Another said that the Treasury opposed any plan that was not “fiscally neutral”.
One sector source said that “filling the gap [in funding] is a massive problem to implementing the review”, adding that the Augar report “places a lot of emphasis on the need to maintain the unit of resource, but I cannot see how that plays out given the cost”.
The Treasury must already find ways to finance extra spending on universities arising from the reclassification of a portion of loan outlay as direct public spending, which is expected to add about £12 billion to the deficit.
The post-18 review, set up by Theresa May in the wake of concerns about the electoral impact of Labour’s pledge to abolish fees entirely, is facing a blizzard of uncertainty.
It is closely tied to Ms May, whose position as prime minister is under intense threat amid the Brexit crisis.
The review is also tied to the Treasury’s expected autumn spending review, which might be downgraded to a one-year exercise because of the uncertainty caused by Brexit. That could mean that the Treasury finds it harder to make the medium- to long-term spending commitments required to implement the Augar panel’s recommendations.
And many believe that the government, with its slim Commons majority, would not have sufficient support among MPs to pass into law measures that lead to a funding cut or to a minimum entry tariff to access student loans.
Chris Skidmore, the universities minister, has staked out a sceptical stance on the review, telling THE that he opposes the minimum entry tariff plan and wants the recommendations to go to full consultation.
He was questioned about the review at a delegated legislation committee meeting on access plans on 8 May.
Jo Johnson, the former universities minister who was moved from that post after opposing Ms May’s decision to hold the review, asked Mr Skidmore whether “the review is imminently to report, or will it require a much longer gestation?”
Mr Skidmore confirmed that he had “not seen the report, which will be published in due course”. He also told Mr Johnson that “any decisions that will need to be taken on this interim report into the overall post-18 review will need to be taken by the Department [for Education], the prime minister…and Her Majesty’s Treasury”.