As the government wonders where on earth to go on university funding – should it cut tuition fees, or replace the system entirely? – a small civil war seems to be looming among the institutions themselves. Members of the elite Russell Group are lobbying behind the scenes for modern universities to bear the brunt of any cuts.
The prime minister, Theresa May, promised a major review of university fees in her speech to the Conservative party conference. There has since been a resounding silence from government on what this might entail, but vice-chancellors are privately resigning themselves to the likelihood of a cut to the maximum fee, which is currently frozen at £9,250. This will leave a funding hole.
Smarting from the media storm about “fat cat” vice-chancellor salaries, whipped up by the former Labour education minister Lord Adonis, few university heads are willing to put their name to their views on funding. Yet serious divisions are opening up.
The head of one Russell Group university, who asked to remain anonymous, says: “Ministers never intended all the new universities to charge the maximum amount. There are some stark surpluses in post-1992 universities, as their costs are much lower. The elephant in the room is whether all institutions should charge the same fees.”
The same vice-chancellor points to the latest institutional data from the Office For Fair Access, the universities’ access regulator, which shows that Lincoln University has £800 more to spend on teaching per student than Oxford, after deducting bursaries and other support for under-privileged students. In 2018-19 Oxford will have an average of £7,915 left from each tuition fee after paying for these “access measures”, whereas Lincoln will have £8,732.
A second vice-chancellor from the Russell Group agrees: “At my university with fees at £9,250 we just break even for home students. But some vice-chancellors have admitted to me that teaching a student only costs them £5,000. At Oxford that is probably closer to £15,000. So you can’t generalise and say the whole sector should be getting less.”
He adds: “Just capping fees at £9,250 is costing us tens of millions over the next five years. I really hope the government is thinking of a way of varying fees, because at the moment the harm is being done to the research-intensives.”
On the other side, Prof Dominic Shellard, vice-chancellor of De Montfort University, reacts angrily. “The idea that modern universities are sitting on mountains of cash is a fallacy,” he says. “Fifty per cent of the sector’s unrestricted reserves are in the hands of just 14 institutions and 13 of them are in the Russell Group.”
Shellard has been holding debates with students and staff at De Montfort on the future of student finance, and is calling for a royal commission to examine the issue nationwide. “Universities are being talked about in a way I can’t remember for a long time. But I don’t think vice-chancellors should duck their heads down because they are terrified of criticism of their salaries,” he says. “Universities are about debate and my students want to talk about these issues. Are students graduating with £50,000 of debt a good thing for the country?”
Prof David Green, vice-chancellor of Worcester University, says: “Those calling for variable fees by institutional ‘reputation’ are very unlikely to be successful – and very unwise.” He argues that Worcester’s fees (set at £8,100 in 2012 and now £9,250) are based on the university’s “best estimate” of what it costs it to educate a student. The university’s income from government grants has fallen from two-thirds of its total to just 7%.
“Jo Johnson [higher education minister] says the issue for students isn’t fees but value for money. He is wrong. The issue is tuition fees,” he says. “Not a single student has ever talked to me about value for money. But students do feel graduates are being asked to pay too much and that the government and firms should be making more of a contribution.”
Nick Hillman, director of the Higher Education Policy Institute thinktank, is also dismissive of the idea that modern universities can more easily afford a cut. “Many have been caught in a perfect storm, losing full-time students in the new competitive market at the same time as part-time student numbers have collapsed. The idea that they are awash with cash is hard to sustain,” he says.
“I’ve been hearing arguments for differential fees, but universities should be careful what they wish for. It could have unintended consequences, such as politicians meddling in what subjects they deliver.”
One idea rumoured to be doing the rounds in the Treasury is that fees should reflect the salaries graduates can command. In June the government published the first full set of its Longitudinal Education Outcomes dataset, the first of its kind to track higher education leavers from university to the workplace. It highlighted real disparities in earning power across subjects and institutions, with subjects including the creative arts and mass communications coming out particularly badly. The salaries for some subjects varied widely according to which institution graduates had attended. For instance, five years after graduation average earnings for business and administration degrees ranged from £19,400 at the University of Wolverhampton to £71,700 at the University of Oxford.
Hillman, who is in favour of controversial data like this being put in the public domain, warns that the results need a lot more discussion before they can safely be used to drive policy.
But Shellard argues: “One of the dangers of the LEO data is you’ll know the price of everything and the value of nothing. Salary isn’t the motivating factor for many students. And once ministers start telling universities what they should and shouldn’t teach you are getting into very dangerous territory.”
Amid the uncertainty, what unites the university sector is a fear that a fee cut will drastically reduce the money available to teach and support each student. Prof Colin Riordan, vice-chancellor of Cardiff University, says: “It certainly looks as if there will be a push for lower fees. Labour’s offer looks very generous to students, but how you could abolish fees without slashing university funding, I don’t know. And we do know that abolishing fees benefits the middle classes most of all.”
Riordan sat on the recent Diamond review of higher education funding in Wales, which ushered in means-tested maintenance grants to support students’ living costs. He argues that Theresa May needs to follow suit.
“I think it was a mistake to abolish maintenance grants and make the less well-off students borrow ever more money. What students really want is money in their pocket now. If their family can’t provide that, the state should and then they would be more likely to go to university.”
Shellard backs him up. “If you look at a university like mine with 50% black, Asian and minority ethnic students, the biggest single thing the government could do would be to bring back maintenance grants. It was a fetishisation of austerity when they removed them three years ago. It was a step too far.”
- The standfirst of this article was amended on 17 October 2017 to remove the reference to Cardiff university, which is also in the Russell Group.
