Another English funding review ‘inevitable’ after fees freeze

Vice-chancellors are increasingly predicting that freezing university income at a time of rising costs makes yet another review of English higher education funding “inevitable”, as institutions face the prospect of “running on fumes”.

The government’s recent, much-delayed response to the Augar review of post-18 education included the announcement of a further two-year freeze of the tuition fee cap at £9,250 – amounting to a freeze of at least seven years in total.

Meanwhile, universities face big increases in their costs at a time of rising inflation, including via energy bills.

Sir David Bell, the University of Sunderland vice-chancellor and former Department for Education permanent secretary, said Sunderland’s “cost of standing still” – paying for “current operations without a pound allocated to new staff or initiatives” – was “approaching £10 million” for 2022-23.

“While the number will be different from institution to institution, this is the situation that we all face,” he added.

He said a future review of higher education funding was “inevitable unless the government – and any future government – is banking on a significantly reduced higher education sector”, in terms of student numbers and student experience.

“That may be a policy choice, but it doesn’t seem to be the articulated aspiration of either the Conservative or Labour parties,” Sir David said.

James Purnell, the University of the Arts London vice-chancellor, a former Labour Cabinet minister and architect of Tony Blair’s 50 per cent higher education participation target, highlighted the fact that the government’s student finance changes mean a heavier burden of loan repayments for the “lower to middle third of graduates”.

“That doesn’t feel to me like a stable system in the long run” and “there is now a debate between now and 2025” on investment, he added.

“I think that at that point with everything we know about the UK being a knowledge economy, I think there will be a very strong case to make that that [investment in post-18 education] now needs to start going up rather than being frozen,” said Mr Purnell, who remains a supporter of tuition fees.

However, others in the sector may see a chance to push ideas for a graduate tax to Labour, particularly after the government extended the loan repayment term from 30 to 40 years.

Lord Willetts, the Conservative former universities minister, argued against the idea of a review. “We’ve had a big review, the Augar review, which has shown there is no big attractive alternative [to fees]. What will need to happen in due course is for fee levels to start rising again…The sector doesn’t need to start suddenly trying to redesign the HE funding system,” he said.

Others questioned whether a Tory or Labour government would have the appetite to raise fees – certain to be an unpopular measure with the public – high enough to address universities’ cost pressures, without rationale from a review.

Sir Chris Husbands, the Sheffield Hallam University vice-chancellor, said: “I just think the politics will always be difficult on a fee increase, and yet the sector is going to look pretty threadbare in 2030 if £9,250 is fixed for another Parliament. 

“I would put my money on there being some sort of review – almost whoever wins the election, actually. A review turns – or appears to turn – a difficult political question into a technical one.”

Sir David said: “Maybe not next year but certainly beyond, there is genuine risk that we start to run on fumes. What an irony after Augar was supposed to be a new settlement and put the English higher education system on a more sustainable footing for both students and universities.”

john.morgan@timeshighereducation.com