Labour is ¡°very close¡± to announcing a higher education funding policy for England, focused on addressing current real-terms cuts and putting the system on a ¡°sustainable¡± footing, according to a shadow minister.

Matt Western, shadow minister for higher education, was speaking at Universities UK¡¯s annual conference during a panel session on the policy outlook.

There has been speculation that Labour will opt for a graduate tax ¨C and Mr Western¡¯s comments seemed to leave the door open to that policy.

He noted that student numbers in England are projected to grow: ¡°How you pay for it? Well, I¡¯m sure we will come onto that separately, but it is the great challenge of our time. One of the things I¡¯m looking at very closely is how other nations address it.

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¡°We do have the highest fees, as you know, in the OECD. That¡¯s got to be a concern.¡±

Mr Western went on: ¡°The [Labour] position is currently that we hold the position from the 2019 election; that we will abolish fees.¡±

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Notably, he did not refer to the fact that the 2019 policy committed the party to not just abolishing fees but funding higher education through direct public spending. That omission might be interpreted as suggesting a lean towards a graduate tax, which would abolish fees but ultimately use graduate repayments to fund the system.

Mr Western added that Labour was ¡°working on how we make the sector sustainable. It is crucial that it is [sustainable] for social as well as economic reasons. We are looking at how we make that work.

¡°But we cannot afford for you [universities] to be basically losing ?1,000 per [student] ¨C I think it is in a humanities subject ¨C compared to where you were five or eight years ago.

¡°When you look at the real-terms decline in the unit of resource then it is quite dramatic. So that does need to be addressed and, trust me, we are very close to coming up with something.¡±

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Lord Willetts, the Conservative former universities minister, appearing alongside Mr Western on the panel, joked that ¡°a review straddling the election period is quite a useful device¡±.

He predicted all three major parties in England would ¡°end up with some kind of graduate repayment system¡± as their policy.

¡°There is not some superior alternative model that in the last 20 years any person in British politics has come up with that does not do what that [graduate repayment] model does,¡± Lord Willetts said.

Earlier at the event, UUK president Steve West called for a ¡°national conversation¡± on a ¡°long-term funding solution¡± for higher education.

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He also warned that by 2024-25 the ?9,250 fee cap in England ¡°will only be worth ?6,600 in 2012-13 prices¡± ¨C when the current system was introduced.

john.morgan@timeshighereducation.com