Worst cases and fee levels are on the agendas

Minutes from a Newcastle University council meeting on 7 February, recently published online, discuss the need for an assessment of the risk that higher fees will drive students away.

"It was confirmed that future fee income was based on the assumption that recruitment levels would remain constant," the minutes state. "It was suggested that the university should consider the possibility that student numbers could decline by up to 15 per cent once the new fee regime was introduced. It was agreed that more sensitivity analyses would be conducted."

A Newcastle spokesman said it was "modelling a 15 per cent downturn as a worst-case scenario but does not expect this to happen".

Bahram Bekhradnia, director of the Higher Education Policy Institute, said that demand for higher education was likely to continue to outstrip supply under the new regime and predicted that price competition would be "extremely limited".

"I doubt any university charging the maximum will see much of a decline in demand," he said.

Meanwhile, the University of Westminster has joined a handful of former polytechnics in deciding to charge fees of more than £6,000 a year.

Westminster says it will cut its staffing costs by £5 million in 2011-12 to make up for cuts in the state teaching grant, which will kick in before universities will be allowed to make up the income gap through higher fees from autumn 2012.

Minutes from a meeting of Westminster's executive board on 25 January state that "to avoid similar cuts year on year", comply with key performance indicators and loan covenant terms, and compensate for the loss of Higher Education Funding Council for England teaching cash, "the university would have to charge fees higher than £6,000".

It has already announced plans to cut 285 jobs by the end of July.

john.morgan@tsleducation.com.