Tuition fees in England would need to rise to £12,500 a year to break even, according to analysis presented to vice-chancellors, amid warnings of the deepening financial crisis facing universities.
But higher education leaders attending the Universities UK (UUK) annual conference were told they would look “out of touch” if they asked for a 35% increase in undergraduate fees from the current level of £9,250, with a UUK taskforce likely to recommend a smaller increase.
Shitij Kapur, the vice-chancellor of King’s College London, said the last time universities in England broke even on undergraduate teaching costs was 2015-16, when tuition fees were £9,000, which would translate to £12,000-£13,000 today after adjusting for inflation.
Kapur said that while £12,500 a year might be the “right number” to reflect the real cost of an undergraduate degree, it was unrealistic to expect the government or public to agree.
“If we suddenly say we’ll go from £9,250 to £12,500, might we seem so out of touch and clueless that we would lose?” Kapur said.
The debate over tuition fees comes as a number of universities are under severe financial strain, with tuition fees increasingly eroded by rising costs such as staff salaries. The Conservative government raised the cap on fees in England to £9,000 a year in 2012 but the level has been frozen at £9,250 since 2017.
Kapur, a member of UUK’s “blueprint commission” working on funding and regulation, said its draft proposal was for an increase in funding to “somewhere in between” £9,250 and £12,500, paid for by a mix of higher tuition fees and indexed to inflation, rising to £9,600 in 2025-26, and an increase in teaching grants by government.
“The issue is not the evidence. The issue is the headline ask,” Kapur said.
A UUK spokesperson said: “If investment in teaching had kept up with inflation, funding per student would be in the region of £12,000-£13,000. To be clear, we are not calling for tuition fees to rise to this level. In fact, more and more of the burden is falling on graduates, and the UK is increasingly an outlier within the OECD on this.
“Our new research out today shows the significant benefits to the Treasury generated by graduates, and we believe it is time for a re-balancing of responsibility for funding to recognise that.”
According to research published by UUK, only 16% of the cost of a university degree was paid by the government, while 84% fell to graduates. It also calculates that every £1 spent by the government generates a further £14 in graduates’ economic activity.
Bridget Phillipson, the education secretary, told delegates via video that there were “no easy answers or quick fixes” to the funding question.
“I can’t promise painless or immediate resolutions but I do promise that these issues will get the attention and the commitment they deserve,” Phillipson said.
David Willetts, a former Conservative universities minister who is also a member of the UUK commission, said he believed the new government was prepared to agree a deal with universities in England for higher funding.
“There’s genuine anxiety in government about universities going bust. Nobody wishes to face that crisis, and the person who has that ministerial responsibility has had that at the back of their minds, along with a ‘risk register’ of problem cases.
“And I think that risk register is looking riskier and more exposed than for a very long time,” Willetts said.
“Secondly, we need to get on with it because students are getting a very raw deal. Setting aside financial crisis, it’s just gradually eroding the quality of the student experience – lectures become more crowded, labs are less well equipped with up-to-date kit. Those are ways in which the education of the next generation is suffering.”
Sally Mapstone, the head of the University of St Andrews and president of UUK, said the funding crisis was not confined to England.
“The most recent data shows a £1.7bn deficit across the UK in teaching alone, with a further £5bn loss in delivering research.
“I know from my visits to universities across the whole of the UK that while the exact cause of the funding challenge varies, we are all feeling the crunch,” Mapstone said.
