24 May 2013 
Matt Sisson, Projects and Membership Manager
The system of fees and student support will “probably be reformed again” in the next five years, according to David Eastwood, chair of the Russell Group. Speaking at the Higher Education Policy Institute conference two weeks ago, Professor Eastwood estimated that the fee cap freeze would leave universities facing a 16% cut in tuition income by 2017, whilst the level of public subsidy needed to support the student loan system would continue to rise due to economic stagnation and low wage-growth, the Times Higher reports.
A new report by Million+ and London Economics has modelled the financial impact of two possible alternatives to the system of university funding, proposed on the basis that they should be cost-neutral to the Treasury, and should not result in a reduction of income for universities. HE Funding for England: Do the alternatives add up? revisits the idea of both a graduate tax, and a £6,000 cap on tuition fees, with funding returned to the form of an increased HEFCE grant, and finds that both funding proposals would be ‘financially viable’, and that they could even result in a marginal decline in treasury borrowing. However, it does recognise that both systems would result in an increase in accounting terms to the BIS budget:
“The disparity between the real (economic) and apparent (accountancy) costs associated with the Higher Education Contribution System arises from the way in which account is taken of the student loan book in respect of departmental expenditure. This raises fundamental questions about how the merits of a particular funding proposal should be assessed and points to the need for accounting rules to be reviewed so that accurate comparisons can be made about the costs and benefits to taxpayers of different higher education funding systems”. The BBC has some further summary commentary here.
In similar news, IPPR are gearing up for the launch of the final report of their "Commission on the future of HE" on the 10th June. Some of the ideas in the report have been released to the press in advance and include a 'cut-price' degree costing just £5,000 a year for students who stay at home whilst studying at a local university.
