Source: Alamy

Funding gap: threat of lost income

Labour may consider a Robbins- or Dearing-style major review of ÖйúAƬ, it has been suggested, as a former Universities UK president warned that the prospect of introducing a ?6,000 tuition fee policy raises a ¡°nightmare scenario¡± of lost income for universities.

As speculation grows that the party will make an announcement on ÖйúAƬ next month, Sir Steve Smith, vice-chancellor of the University of Exeter, said that the prospect of ¡°a Labour commitment to reducing fees to ?6K carries the most significant risks¡± of any issue facing the sector at the coming general election.

The BBC¡¯s economics editor, Robert Peston, wrote in a blog post at the weekend that he had been told that Ed Miliband, the Labour leader, ¡°wants to next month announce an eye-catching policy of cutting maximum university fees for students by a third, from ?9,000 to ?6,000¡±.

Some sources suggest that Labour¡¯s announcement next month may include a pledge to hold a major review of ÖйúAƬ, which could allow deferral of a detailed fees policy. Liam Byrne, Labour¡¯s shadow universities, science and skills minister, told the House of Commons in a debate on ÖйúAƬ funding earlier this month that there is ¡°an unanswerable case¡± for a review given the rising cost to the government of student loans. He went on to say that if ¡°things should change, good people should reflect on what those things should be¡±, and added that ¡°we should call that reflection a review¡±.

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Sir Steve, who was UUK president in 2010 when MPs voted to raise tuition fees to ?9,000, discussed Labour¡¯s deliberations at a ÖйúAƬ Policy Institute seminar on January.

¡°We absolutely need clarity on this proposal, because the nightmare scenario is that a party fighting an election makes promises to win seats, but then cannot deliver the resource to make up the difference to universities,¡± he said.

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Sir Steve said that his own estimates put the cost of a ?6,000 fees policy at ?2 billion a year.

He added that Labour¡¯s ¡°common answer¡± on how to find the money ¡°is that by reducing fees from ?9K to ?6K, they will save future RAB charges [the write-offs on student loans], and these could be funnelled into [government spending]. But this simply does not work, because they are different types of money, treated differently in the government¡¯s accounts.¡±

Meanwhile, Sir David Bell, the vice-chancellor of the University of Reading and former permanent secretary at the Department for Education, said that if Labour¡¯s plan for ?6,000 fees ¡°has to be pulled together ¨C produced, prepared, published ¨C in the next couple of weeks, it will of course become principally an election battleground issue when actually it probably needs to be considered in a more sober light¡±.

He suggested that Mr Peston¡¯s post might be part of a ¡°conditioning of expectations between now and the election¡±, for Labour ¡°to say ¡®we may not now this side of an election publish all of the detail¡¯¡±.

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john.morgan@tesglobal.com