UK cash chasm warning

February 20, 2004

A £4 billion funding gap between English universities and their US counterparts will persist despite the extra income from top-up fees, the head of the elite Russell Group of universities warned this week.

In an interview with The Times Higher , Michael Sterling - chairman of the Russell Group and vice-chancellor of Birmingham University - said the government's plans to boost university funding by charging tuition fees of up to £3,000 a year from 2006 would do nothing to help England's best universities compete internationally - a key government aim.

Professor Sterling said that as the government had pledged not to raise the £3,000 cap on fees until at least 2010, it should be prepared to fill the gap from the public purse.

"The gap left by the £3,000 cap on top-up fees is huge," he said. "It leaves us less than two-thirds of the way towards closing the funding gap with America. If the government gets its top-up fees legislation through Parliament, I'm looking forward to seeing its plans to close the gap."

The figures came from Professor Sterling's own analysis of data from the Organisation for Economic Cooperation and Development. The Russell Group has repeatedly stressed the gap in meetings with Charles Clarke, the education secretary, and Alan Johnson, the higher education minister.

Professor Sterling said that by 2008-09, when all three year groups of students at any university would be paying top-up fees, the unit of resource per student would rise by £1,700 per student to £7,200 - some £3,800 per student less than the US.

Professor Sterling said he agreed with the thrust of an independent think-tank's report last week that analysed the funding gap faced by Oxford University.

The paper from the Oxford Centre for Higher Education Policy Studies (Oxcheps) calculates the cost of educating a single Oxford student to be an average of £18,600 a year - more than double the £8,800 per student that the university receives in public funding.

The report says that although £3,000 top-up fees would help plug the gap in the short term, by 2012 Oxford would face a £14 million deficit on the cost of educating undergraduates if the £3,000 cap remained.

The Russell Group was due to discuss the Oxcheps report on Friday, including its proposals to charge variable fees of up to £10,000 a year for the richest students. Under the Oxcheps proposals, a student from a family with an income of less than £45,000 would pay £2,475, and one from a family with an income below £30,000 would pay nothing.

A spokeswoman for Oxford said the report was independent but the university was confident that the figures were accurate.

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