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In the red? V-cs would fear for their coffers if tuition fees were lowered

A public letter from the Universities UK board warning Labour against a ?6,000 fee policy was needed because the party has ignored the ¡°legitimate concerns of vice-chancellors¡± and the policy would cut support for students¡¯ living costs, according to two of its signatories.

The 19 English board members of Universities UK launched a pre-emptive attack on the possible Labour policy with on 2 February.

The move may increase the chances of Labour opting to pledge that it would hold a wide-ranging Robbins or Dearing-style review of higher education if it wins the election, which could allow it to avoid a detailed policy commitment now. Nick Hillman, director of the Higher Education Policy Institute, said the chances of this were ¡°hardening all the time¡±.

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The letter¡¯s signatories, led by Sir Christopher Snowden, the UUK president and University of Surrey vice-chancellor, say that ¡°at least ?10 billion of additional public funding would need to be found¡± to close the funding gap for universities if fees were lowered to ?6,000. They say it is ¡°implausible¡± that any government would be able to do this, so ¡°cuts to universities¡± would be the result.

Sir David Bell, the University of Reading vice-chancellor and one of the signatories to the letter, said that the move was ¡°necessary as there was increasing speculation that Labour was about to announce its policy, and little sense that it had taken account of the legitimate concerns of vice-chancellors¡±.

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Graham Henderson, the Teesside University vice-chancellor and another signatory, said that simply cutting fees could ¡°result in critical funds being redirected to finance this change that could otherwise be used to facilitate wider access to higher education¡±, such as putting ¡°more money in students¡¯ pockets to assist them¡± with their education costs.

But Gavan Conlon, partner at London Economics, which has carried out research on the resource accounting and budgeting charge (the estimated write-off) on student loans, said that the actual costs of lowering fees to ?6,000 are ¡°nowhere near¡± ?10 billion.

He argued that the RAB charge on the portion of loans between ?6,000 and ?9,000 is high under the current system ¨C meaning that cutting fees could bring a saving on future loan write-offs.

Dr Conlon said that ¡°approximately 60 to 65 per cent of the fee income between ?6,000 and ?9,000¡± is being paid by the taxpayer through loan subsidies, ¡°and a further 15 per cent is being ploughed into access bursaries¡± by institutions.

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john.morgan@tesglobal.com