£9,000 is no surprise13 February 2011
With the Browne Report, the Adam Smith report, and the tuition fees vote, I had written a few bits on fees. However I did not have time to collate it into a consistent article while it was topical, so with the news that Oxbridge are charging the maximum, I decided it was time to publish some of my thoughts. In summary the fees arrangement are the quick fix in a time where deficit reduction is critical, and underlying structural problems mean that Exceptional Circumstances will be interpreted in Humphrey Appleby fashion when it comes to setting fees.
£6,000 fees are inadequateIn the Browne Report a cut in HEFCE funding was assumed, and the report stated that it expected £7000 fees to be charged in order to break even. This figure corresponds to that quoted by Universities UK, as well as the more detailed per-institution breakdown done by the Universities & Colleges Union. In the latter, the range was £6,251 to £7,709, with £6,863 being the average. Even the NUS thought that charging more than £6,000 would be routine.
Problem with this analysis is that they assumed the previous funding was at break-even. This is of course fiction, as most undergraduate teaching racks up huge losses. Now guess why several Chemistry and Physics departments have closed. £7,000 is really a running-backward-at-same-speed level rather than a standing-still point, and with that in mind an upper cap of £9,000 does not give much room for anything other than a clustering at or near the top.
..and Widening Participation is costlyAnother problem is the costs of bursaries, especially for the FSM (those who qualify for Free School Meals) students where the university has to forego an entire year's fees. Cambridge has a proposed system where the fee level is graduated, but charging some people only £6,000 and giving them an extra grant is offset by charging right up to the limit at the other end of the scale. Cambridge has set quite a high threshold for the upper limit (equivilent to top-rate income tax), and I suspect they are relying on opt-outs from income declaration to keep admin down.
It's really about subsidy limitingAccording to the IFS report into higher education reforms, typical fee level of £7,500 is what is best for the government, because above this level the number of students who will have at least part of their fees written off increases sharply. The government pays this shortfall, and limiting the costs of this is the real reason they are making noises about sanctions of lots of universities opt for the maximum. In fact any increase of the cap above £9,000 would be overwhelmingly paid for by the government, particularly as much above that level, the wealthiest students would find paying international rates up-front to be cheaper.
International visa limitsThe last nail. The best students go to Tsinghua or Delhi Institute of Technology. The second-best (and the richest) go to Harvard. The UK gets third pick. Attracting international students is not about getting the best, it is about the unlimited fees they pay. International fee income is how some universities have subsidised the huge losses home undergrads entail, and curtailing visas means that home fees are the only income source not being cut.
Voting Labour won't helpFor all their anti-fees rhetoric, it was Labour that introduced fees, and dispite a pledge not to, then went on to raise them.The Browne Report was commissioned by Labour as a way of deferring a decision until just after the election, and then Labour cut both teaching and research grants, which in total amounted to about £1 billion. Anyone who thinks Labour voting against was anything other than shameless opposiiton politic is living in dreamland.