Subsidies and uncapped fees ‘most rational’ way to finance universities

Removing the £9,000-a-year cap on tuition fees and requiring universities to ensure they are helping poorer students to pay them is the “most rational” way to finance higher education in the UK, a Russell Group vice-chancellor has told Times Higher Education.

Sir Howard Newby, vice-chancellor of the University of Liverpool, said that although it was unlikely that there would be any changes to the current fee system for at least three years, the next step could see universities able to charge as much as they want for courses, provided they subsidise the costs incurred by students from poorer backgrounds.

“Nothing is going to happen this side of an election, so what we have at the moment we are stuck with probably until at least 2017, and that includes the £9,000 fee cap,” he said, speculating that any new government would likely conduct a comprehensive spending review after entering office, restricting what changes might be made until the end of the 2016-17 financial year.

“The most rational way to deal with the financing of higher education is to have fees which are uncontrolled, with no cap, but in return [universities] have to make adequate provision for looking after students who can’t afford to pay that fee,” Sir Howard said.

He said the approach, which would mean a “sliding scale where the higher the fee, the more money is devoted to meeting the cost of higher education”, was in line with recommendations published in the 2010 Browne Review.

“I suspect we might end up with something like that, but it’s become such a toxic issue politically…that it is all going to wait until after the election.”

Sir Howard also warned that the UK’s “xenophobic, inward-looking grumpiness” could be putting international students off Britain.

He said that the May European election results – which saw the UK Independence Party take per cent of the national vote – set “a kind of mood music” for the UK that could deter would-be overseas applicants. “There has been a worrying trend over the last few years of a rather xenophobic, inward-looking grumpiness in the UK – not least of course as a result of the recession, a lot of which is blamed on Europe as a convenient scapegoat,” he said. “I think it portrays a rather ‘little Englander’ version of us, which I find rather depressing.”

Sir Howard cited January figures from the Higher Education Statistics Agency, which revealed that the number of non-EU students at UK universities fell by 1 per cent between 2011-12 and 2012-13, the first such decline ever recorded, adding that it was “not necessarily coincidental” that this happened during a period of increased Euro-scepticism.

The Liverpool vice-chancellor was speaking ahead of the Global Universities of the 21st Century conference in the city – for which THE is a media partner – which takes place on 24-26 June 2014 as part of the International Festival for Business 2014.

chris.parr@tsleducation.com