Willetts backs ‘£9k for everyone’ without ‘price competition’

Conservative peer Lord Willetts has criticised the idea of forcing some English universities to lower their fees from the £9,250 maximum – an idea said to be under discussion within government – warning against judgements about “good” and “bad” universities.

The former universities and science minister warned against the introduction of different levels of fees at different universities, saying that the “best and simplest system by far is £9k for everyone”, when he spoke at an event on the future of tuition fees hosted by the Resolution Foundation and the Centre for Global Higher Education on 12 September.

Lord Adonis, the Labour peer who was one was one of the architects of tuition fees when introduced by Labour in 2006, also told the event that he had “never wanted” to introduce fees, but his preferred options were ruled out by former prime minister Tony Blair.

The debate came on the day that Labour said that it had forced a binding Commons vote – to be held on 13 September – on the rise in fees to £9,250 this autumn, seeking to revoke the regulations authorising that change.

In reference to political turmoil over the current system, Lord Willetts told the event that it would be “perfectly possible to bring back some maintenance grant”. He added that the current system was “healthy and vigorous”, although it had “specific features that can be reviewed”.

Lord Adonis has claimed that a university “cartel” is the reason why all institutions charge the £9,000, now £9,250, maximum.

But on “price competition”, Lord Willetts said: “I expected that there would be [when creating the current system in 2010] and there hasn’t been. And there’s been a long-standing belief in Whitehall that somehow price competition was right and that failing to get it was a defect.”

Lord Willetts added that “as soon as you look at the logic of the [income-contingent] graduate repayment scheme, you realise why there isn’t price competition”.

The Sunday Telegraph reported on 10 September that “Treasury officials are exploring whether publishing more data on the impact that courses have on future earnings could force universities to lower prices”.

Lord Willetts is reported to have been invited to 10 Downing Street to meet James Marshall, Theresa May’s head of policy, to discuss options for changes to student funding.

The peer told the event that data gathered by Institute for Fiscal Studies researchers and others on graduate earnings by university shows that the level of earnings “depends to some extent on the geographical location of universities”.

Lord Willetts questioned why there should be a “reward” for universities in the South East, where graduate earnings are highest. He asked: “Why should that be something that’s the basis of price competition?”

“The more I worked on universities the less confident I became in these judgements about what constitutes a ‘good’ or a ‘bad’ university,” he continued. “So much of their performance depends on the prior attainment of their students, the social background of the students.”

Drawing a contrast with schools funding, Lord Willetts argued that any plan for price competition related to graduate earnings was effectively saying: “’We’ve got this brilliant idea: we think there should be fewer resources for this East End secondary school compared with that Cambridge secondary school’. Why is the higher education debate to be conducted on exactly the opposite principle to the secondary school debate?”

Lord Adonis told the event that he had “never wanted to introduce tuition fees.” Instead, he had attempted to persuade Tony Blair to raise the top rate of income tax to create a university “trust fund”, which would have topped up universities’ public funding.

But with Mr Blair unwilling to countenance tax rises, Mr Adonis said that the focus had then fallen on fees. He had argued for the Australian model of tiered fee caps for different subjects – for a system of £3,000, £4,000 and £5,000 caps, which he said “would have been sustainable”. But this was rejected by Mr Blair as creating fees that were too high, said Lord Adonis.

The peer said of the legislation that Labour introduced to create £3,000 tuition fees: “It never crossed my mind that what would happen would be an increase in fees to £9,000.”

Labour “should have capped” fees in the legislation, meaning there would have been “full Parliamentary and public debate about going up to £9,000”.

Lord Adonis argued that the onus was on vice-chancellors if they wanted to preserve tuition fees and they should cut fees by “at least £1,000 a year starting now”. This might ultimately allow for the survival of a system of fees at £4,000 or £5,000 a year, he said – otherwise fees would be “abolished outright”.

john.morgan@timeshighereducation.com