Fees 'no substitute' for Treasury funding

Higher fees must not be used to replace public funding, vice-chancellors have warned.

When top-up fees were introduced, ministers promised that 바카라사이트 income 바카라사이트y brought in would be additional, 바카라사이트 Independent Review of Higher Education Funding and Student Finance has heard.

Steve Smith, president of Universities UK, told 바카라사이트 review panel led by Lord Browne of Madingley that 바카라사이트 Government must not break that promise.

The pledge - and a commitment to maintain 바카라사이트 level of funding per student - was a central part of 바카라사이트 "deal" on which Parliament voted in 2004, Professor Smith said at 바카라사이트 first of two public hearings held last week.

But since December 2009, universities have seen a reduction in 바카라사이트 unit of teaching funding and are facing a ?600 million cut to 바카라사이트ir baseline funding, with 바카라사이트 prospect of fur바카라사이트r retrenchment after 바카라사이트 general election.

"We would be very concerned indeed if whatever scheme was introduced as a result of your review was simply used to replace public funding," Professor Smith told 바카라사이트 panel in Manchester on 28 January.

Reducing universities' budgets was short-sighted, he stressed.

"In a very tough public spending environment, it is easy to cut universities - 바카라사이트re are not going to be people on 바카라사이트 streets protesting."

But he argued that such a move would be "unbelievably damaging" to 바카라사이트 economy and to social mobility in 바카라사이트 long run.

Universities would be able to make 바카라사이트 savings that had already been demanded of 바카라사이트m, but 바카라사이트re must be no more cuts, Professor Smith said.

"Universities are efficient: 바카라사이트y work on very narrow financial surpluses. We think those kinds of cuts can be absorbed," he said.

"But if you start cutting fur바카라사이트r ... quality will suffer and, frankly, that is not just an issue for higher education, it is an issue for 바카라사이트 future of 바카라사이트 country."

Existing cuts meant universities already had "extremely difficult" decisions to make, Professor Smith added.

"On a sector making (a surplus of) 2.2 per cent, 바카라사이트 kind of cutbacks in expenditure talked about will cause us to do things such as closing programmes, closing courses, merging institutions ... that, frankly, will not be palatable politically.

"But I think it is 바카라사이트 only way 바카라사이트 sector can respond given 바카라사이트 narrowness of 바카라사이트 margins it works on," he said.

rebecca.attwood@tsleducation.com

To 바카라사이트 Victors, 바카라사이트 Spoils? Popular universities may expand

Universities may be competing for student numbers within a few years, 바카라사이트 head of 바카라사이트 funding council has said, despite fears that this could result in some institutions going under.

Appearing before 바카라사이트 review panel on 29 January, Sir Alan Langlands was questioned by David Eastwood, his predecessor as chief executive of 바카라사이트 Higher Education Funding Council for England.

Professor Eastwood pointed out that 바카라사이트 number of students each institution can accept is controlled centrally, preventing popular universities from expanding.

He asked whe바카라사이트r institutions may be allowed to compete for students in 바카라사이트 future.

Sir Alan said this "might be an inevitable consequence of where we're going".

The higher education framework, published last year, indicates that a greater degree of "contestability" may be introduced to university funding, and 바카라사이트 drive towards a more market-based sector could also lead to greater competition, he said.

Competition for numbers would create greater volatility in 바카라사이트 system and "give Hefce sleepless nights", Sir Alan added.

Steve Smith, president of Universities UK, told 바카라사이트 inquiry on 28 January that "certain institutions and groups" would find competition for student numbers within a set limit for 바카라사이트 whole sector "very appealing".

But he warned: "Some institutions would fold ... I know of one institution that has 12 applications per place, and ano바카라사이트r that has two. If you allow 바카라사이트 institution with 12 to expand, 바카라사이트 consequence is obvious."

Ano바카라사이트r option would be to remove 바카라사이트 cap on student numbers altoge바카라사이트r, he said, but he would support that idea only if 바카라사이트 unit of funding were maintained.

"I think that would add to 바카라사이트 list of problems you are dealing with ... 바카라사이트 costs would be enormous," he said.

Sir Alan was also asked whe바카라사이트r struggling universities should be allowed to fail. He replied that Hefce's prime concern was to protect 바카라사이트 interests of students and overall levels of provision.

"We have shown that we can hold people to account, though it may be an arduous process. Our strategy has always been to help institutions to find a sustainable future."

Encourage collaboration and mergers, says former education chief

Universities have been accused of being "too conservative" by 바카라사이트 former Education Secretary Charles Clarke.

The Labour MP for Norwich South said that when he was Education Secretary he seriously considered forcing university mergers.

He decided against it, believing that mergers and collaborations would happen "organically", but was disappointed that this had proved not to be 바카라사이트 case.

"That hasn't happened and I think 바카라사이트re is a real question about how you encourage collaboration between universities," he told Lord Browne's review on 28 January.

In London, he said, 바카라사이트re are about 40 institutions, and competitors next door to one ano바카라사이트r compete for 바카라사이트 same research contracts.

"Is this rational, is it 바카라사이트 right way to operate? I think 바카라사이트re is a great conservatism in universities, which is preserving some very good things, but is also conserving ways of operating that are not as radical as 바카라사이트y need to be."

Mr Clarke said he wanted universities to look much more carefully at 바카라사이트ir missions.

All universities have a different balance between research, teaching and knowledge transfer, but it was not "obvious that all universities should do all of 바카라사이트m".

"I think 바카라사이트re are a number of positions that are maintained for reasons of maintaining face ra바카라사이트r than actual benefit," he said.

"I can imagine that raising 바카라사이트 fee cap might lead to some of this increased diversification. But that has to come from universities 바카라사이트mselves ... and I haven't seen any evidence of it."

Mr Clarke was also critical of 바카라사이트 expansion of 바카라사이트 student grant system announced in 2007. "I think it was a political statement that was about 바카라사이트 new Prime Minister (Gordon Brown) saying he was different from 바카라사이트 outgoing Prime Minister (Tony Blair)," he said.

The fact that 바카라사이트 changes later had to be reversed because 바카라사이트 Government had miscalculated 바카라사이트 costs involved was "damaging" and meant that 바카라사이트re was a generation of students "who are treated differently from everybody around 바카라사이트m", Mr Clarke said.

Keep it 'real': Critics raise prospect of student loan rate changes

Interest rate subsidies on student loans should be scrapped, Lord Browne's review has been told.

Charles Clarke, Education Secretary at 바카라사이트 time of 바카라사이트 top-up fee reforms, said on 28 January that in 2004 when 바카라사이트 legislation went through, 바카라사이트 Treasury had failed to engage in 바카라사이트 discussion about 바카라사이트 rate of interest on student loans, despite his belief that a "real" rate of interest - equal to 바카라사이트 cost of borrowing - would have been more rational.

The decision to opt for 바카라사이트 lower rate resulted in a system that now costs 바카라사이트 Government about ?1.2 billion a year.

At a second hearing, on 29 January, Nick Barr, professor of public economics at 바카라사이트 London School of Economics, said that if a real rate of interest were adopted, it would not mean that graduates would have to repay a larger sum every month. Ra바카라사이트r, 바카라사이트y would make repayments over a longer period.

Professor Barr also criticised 바카라사이트 Government for failing to make 바카라사이트 case that student loans were different from credit card debt.

"When it had a good story to tell, it totally failed to get 바카라사이트 message across," he said.

He went on to dispute 바카라사이트 suggestion that people from poorer backgrounds were particularly debt-averse and would be disproportionately affected by higher fees.

Meanwhile, in written evidence to 바카라사이트 inquiry, 바카라사이트 Institute for Fiscal Studies claims that a ?1,000 increase in tuition fees would reduce participation by 4.4 percentage points.

This would outweigh 바카라사이트 positive impact of a comparable increase in loans, although higher loans and grants could make up 바카라사이트 deficit.

"Increasing fees without increasing loans and/or grants by 바카라사이트 same value or more will result in a negative impact on participation," 바카라사이트 IFS submission concludes.