MPs warn over tuition fees funding gap

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England’s universities could be hit by a funding gap due to a miscalculation over the number which will charge top tuition fees, an MPs’ report says.

The Public Accounts Committee (PAC) said more universities than expected were going to charge fees of £9,000.

As the government pays fees upfront and recoups the money when students graduate, it could cost taxpayers an extra £95m a year, say the MPs.

But the government says the likely cost is not yet clear.

The Department for Business, Innovation and Skills says the cost to government will not be known until late next year when students have enrolled and received their loans.

Financial health

According to the PAC, any shortfall could lead to further cuts and fewer places.

Universities are in the process of declaring their fees for new students in 2012-13.

When the cap on fees was lifted last year, ministers said the top rate of £9,000 could only be charged in “exceptional circumstances”.

However, 60 out of 124 higher institutions in England running undergraduate courses have now said they will demand the highest fee for at least some of their degrees.

The BBC’s education correspondent Gillian Hargreaves added: “Privately, ministers ruefully admit the phrase ‘exceptional circumstances’ has caused them some political damage – however, they are adamant they will not change the policy.”

The PAC says it is unclear whether the trebling of university fees will deter students from applying.

The report says: “The funding council is not expecting any disorderly failures to occur, but a market-based system will increase risks to institutions and there is no guarantee that institutions in difficulty will be necessarily supported.”

The report also calls for England’s funding body, the Higher Education Funding Council, to ensure students have enough information about the financial health of the universities they choose to study at.

Committee chairman Margaret Hodge said: “The department must make sure that students are provided with relevant and reliable information.

“Where an institution is at higher risk, the current practice of the funding council is to disclose nothing publicly for three years in the interest of that institution.

“We do not accept this practice and, where students’ investment and their education are at risk, urge earlier disclosure.”

Wrong sums’

A spokesman from the Department for Business, Innovation and Skills said many universities would offer extensive fee waivers and bursaries from 2012.

He said that by 2014-15 public support for universities could rise by 10% in cash terms.

“Under the new education reforms we are putting students in the driving seat, rather than allocating funding though a central grant,” he added.

“Providing prospective students with clear, comparable information about what and how they will learn is a priority for our reforms.”

Sally Hunt, general secretary of the UCU lecturers’ union, accused the government of following the wrong course over higher education.

“Unless they pause, like they did with the NHS, they will do lasting damage to the sector,” she said.

“It is clear they have got their sums completely wrong and that their entire funding model is in disarray.”

National Union of Students president Aaron Porter said: “These poorly-conceived funding arrangements and a failure to model the impact of decisions on universities across the country have created great uncertainty and instability whilst at the same time looking set to increase the cost to the taxpayer.”

Nicola Dandridge, chief executive of Universities UK, said there was still a great deal of uncertainty over the level of student demand and for which courses, and the extent to which students will take out loans.

“The final cost of the new funding system to the government is therefore far from clear,” she said.

The PAC report comes as Oxford University academics prepare to hold a vote on a motion of “no confidence” on the government’s higher education policies.

On Tuesday, the university’s governing body is due to consider a symbolic motion backed by about 175 academics.

BBC NEWS, 2011

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