Student numbers cap return could bring English sector battle

A potential lowering of tuition fees in England to about £6,500, with extra funding for high-cost subjects only, could offer a way for the government to resolve its concerns about cross-subsidy between disciplines, but any return of student number controls would be fiercely contested.

The Times reported on 3 November that an “early draft “of the review of post-18 education, led by Philip Augar, “suggests cutting tuition fees to between £6,500 and £7,500 a year, with the shortfall made up by the Treasury”, which it put at a cost of about £3 billion a year.

The review has been delayed so that it can take account of a key Office for National Statistics review of the accounting treatment of student loans, to be published on 17 December.

Meanwhile, as Times Higher Education has reported, the Department for Education has commissioned accountants KPMG to carry out a study of how much it costs universities to teach their students, a move seen by many in the sector as a potential mechanism to lower the tuition fee cap and address worries about cross-subsidy.

It is also thought that among the emerging ideas that the Augar review panel is in process of discussing with ministers is a mechanism to cap student numbers. Any significant reintroduction of direct funding could require a means to control public expenditure.

The last major review of higher education funding, the Browne review of 2010, proposed a minimum entry tariff to control student numbers.

But one Westminster figure said that there is “no evidence the Treasury is willing to put in the money” to replace lost fee income.

Alistair Jarvis, the Universities UK chief executive, said: “Any proposal to reduce student numbers would put social mobility into reverse, create skills shortages and limit opportunities for young people aspiring to go to university.”

Others could welcome the return of student number controls if it came at institutional – not just sectoral – level. The abolition of student number controls in 2015, and the creation of a highly competitive market in student recruitment, is seen as having contributed to the financial problems of a number of universities currently returning multimillion-pound deficits.

However, those universities that have lost out in the current recruitment market will have concerns that the return of institutional controls, if based on current numbers, will “bake in” their losses and the gains made by some Russell Group universities.

If the government were to use the KPMG study to cut fees to the price of the lowest-cost subjects, and only top up with public funding on higher-cost subjects, that would be one way for the government to address concerns about cross subsidy.

A truly variable system of fees, with prices for graduates varying between different subjects, could be another. But some in the sector argue that the latter is unlikely, as it would require primary legislation.

The Higher Education Research Act 2017 says in relation to mandatory fee limits that they must not be used to discriminate “between different courses at the same or a comparable level on the basis of the areas of study or research to which they relate”.

Lowering the fee cap universally, by contrast, would require Parliament to approve an affirmative resolution on a statutory instrument, some suggest.

Greg Walker, MillionPlus chief executive, said: “It is not clear what the purpose of the leak from the post-18 review panel was. The notion of generally lower fee caps could reflect a Treasury concern to save resource in the short run, despite likely negative impacts in the longer term on our ability to prosper and include all social groups in the benefits of HE.

“But the idea of differential fees by subject, if this is in their minds, is disappointing because so many reports and presentations have pointed to the obvious disadvantages of this proposal.”

john.morgan@timeshighereducation.com