Future funding of universities

There’s an interesting feature in today’s Times about UKuniversities losing ground to their foreign rivals, thus raising questions about whether the cap on student fees should be lifted.

Student tuition fees were of course introduced when Tonya Blair was Prime Minister. Blair commissioned a review at a time when he was increasingly persuaded by the idea of giving universities some freedom to set prices for their own courses, with students contributing through deferred loans.

This would switch the payments from the parents (who tended to carry the burden of payment) to the students once they were benefiting from having been at university.

But it would also provide much needed additional income for universities.

Some argue that the income stream has not been enough. The Economist have said: ‘Nobody disputes that Britain’s universities are in a mess. The proportion of young people going into higher education has risen from 5% to 35% over 40 years, but universities have not been provided with the money, or the means of raising it, to pay for the increase. The quality of research and teaching have therefore suffered.’

Today’s report provides further evidence of this. Say the Times:

‘British universities have slipped down the world rankings as they compete ever harder with eminent institutions overseas.

Cambridge and Oxford have lost ground to Harvard and Yale, while fewer British universities are in the top 200 list, published today, than last year.
Vice-chancellors and commentators voiced concern that, without an increase in investment, Britain’s standing as a first-class destination for higher education could be under threat.

Wendy Piatt, director-general of the Russell Group of leading universities, said that its members were performing well against international rivals, adding: “The table reflects the growing strength of our major competitors – particularly the US institutions – which benefit from much higher levels of investment than UK universities.

“Without increased investment there is a real danger that the UK’s success will not be sustained.’

It seems inevitable that a future government will life the current cap on fees of £3,140. Chris Patten, Vice Chancellor of Oxford, has said that the cap should be lifted so that graduates are left with mortgage style debts of £50,000.

You can see the full 200 list here