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Degrees of separation, by Stephen Court

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13 May 2005

As universities in England look forward to extra income from top-up fees next year, those in the rest of the UK face both an influx of English students and an academic brain drain as a result. Stephen Court reports on the growing cross-border tensions

England and Scotland have a history of cross-border raids. These days the warring tribes are not the Picts, Britons and Border Reivers of old but students looking for a relatively low-cost education and universities competing for bigger resources and the best staff. And there is tension, too, on each side of Offa's Dyke, with Welsh universities fearing an invasion of English 'fee refugees' as well as wealthy English institutions luring away the best of their staff and students.

There is some evidence for this. The latest data on full-time undergraduate courses starting in 2005 show that English residents' applications have risen by 9% for places at English universities, but 12% for places in Wales, 17% for places in Scotland and 30% for places in Northern Ireland. By contrast, two years ago, applications from English-domiciled students for courses in Wales were down by 1% and for those in Scotland down by 5%.

Although annual top-up fees are not being introduced in England until autumn 2006, the furore over the legislation last year could already have encouraged English-domiciled students to study elsewhere in the UK.

In Scotland, Enterprise and Lifelong Learning Minister Jim Wallace fears that the current balance in Scottish universities of students from the home country and the rest of the UK 'will be disturbed by increases in fees in England, and it is possible that this will encourage substantially more students from the rest of the UK to come to study in Scotland, thereby potentially displacing Scottish applicants. This may be particularly acute in relation to demand for places at Scotland's medical schools.'

And Ian Johnston, principal of Glasgow Caledonian University, is concerned that England's better resources from fee income might lure Scottish academics south. 'The most important thing for the Comprehensive Spending Review in 2006 is for the Scottish Executive to find a way to maintain its current generous plans in relation to teaching infrastructure, so that the quality of experience of students in Scotland remains competitive and that we don't fall behind in pay,' he says.

The Welsh Assembly commissioned a review of student support and fees in Wales, led by Professor Teresa Rees, following the decision to bring in top-up fees in England. Its interim report, published in February, stated: 'Cross-border flows of students (and staff) are highly sensitive: a small increase or decrease in the proportion of students from England that decide to study in Wales, for example, can have a profound impact on HEIs [higher education institutions] here. Lower fees in Wales are likely to attract more non-Welsh-domiciled students to Welsh HEIs. If Welsh HEIs experience an increasing deficit in resources, this will further weaken their infrastructure, reducing their ability to recruit and retain staff, pursue high-quality research and teaching and attract potential students. Hence, they need to be resourced at the same rate as England.'

Devolution under New Labour has opened up a marketplace in tuition fee and student support regimes. Policy changes in one country are putting pressure on other parts of the UK to either follow suit or set up a robust alternative. And differing imperatives in the universities and legislatures of Britain are creating a variety of goals in higher education.

Although all parts of the UK had similar tuition fee and student support systems when Tony Blair became prime minister in 1997, that was soon to change. Pressure had been building for improved funding for higher education to cope with the massive influx of students in the late 1980s and early 1990s. Blair's solution, in 1998, was to introduce upfront tuition fees of £1,000 a year for full-time undergraduates in the UK. He also scrapped maintenance grants, replacing them entirely with loans.

The Scots in their new Parliament were the first to overturn the new fees and finance regime. In 2000, they abolished upfront tuition fees for Scottish-domiciled students, replacing them with a single £2,000 endowment payable by graduates. The Scots also brought back cost-of-living grants. From 2001, student support in Scotland has been a mixture of loans and means-tested non-repayable maintenance bursaries.

Jim Wallace says the abolition of upfront fees 'established a powerful principle of free tuition. It sends a strong signal that our higher education system is one of open access to students of all backgrounds'.

In 2002, Wales followed Scotland's lead on student support and established means-tested non-repayable Assembly Learning Grants.

Pressure from universities for increased income led to the hotly contested legislation last year to allow English universities to charge students variable top-up fees of up to £3,000 a year from 2006. Virtually all English universities and higher education colleges are charging the full amount. Students will have to take out a loan to pay the fees, unless they are able to pay upfront, which they will have to repay after graduation once they earn more than £15,000 a year. In return, universities have to provide bursaries for the poorest students, and the government is bringing back means-tested maintenance grants of up to £2,700 a year to coincide with the new fee regime in England. Institutions charging the full £3,000 have to provide a bursary of at least £300 to students receiving the full grant.

When institutions unveiled their bursary offers earlier this year, it was clear that this was where the market was operating. While some universities – particularly the so-called new ones – and specialist colleges are offering only the minimum, others are going all out to attract the best of the students of slender means with generous bursaries (as well as a range of enticements including free laptops, bicycle vouchers and subsidised accommodation).

The University of Oxford is providing a minimum bursary of £4,000 a year for the poorest students, with Durham (£3,000), Imperial College London (£2,700) and the London School of Economics (£2,500) not far behind. Many other universities and colleges are stumping up a minimum of between £1,000 and £1,500. Some of the highest bursaries include £3,000–£5,000 at Cambridge, £1,000–£5,000 at Manchester and £1,500–£5,000 at University College London.

This has attracted criticism from the new universities, which are generally less wealthy and already tend to have a higher proportion of disadvantaged students. Professor Michael Driscoll is vice-chancellor of Middlesex University and chair of the Campaigning for Mainstream Universities group, which primarily represents the former polytechnics. He says: 'It is clear that many more of our students will receive bursaries but that a significant amount of what was supposed to be additional income for universities will actually be diverted into student support and administrative costs.'

Middlesex University will be offering a minimum bursary for poorest students of £300 and a maximum of £1,000. 'Full-time undergraduate students with the same family income will get different benefits and bursaries, not according to their ability to study, but according to which course they want to study, which university they attend and what that university can afford.

'It is difficult to understand why any government should back a scheme that promotes such glaring inequalities for students and universities, and inevitably means that many universities have to spread the bursary jam more thinly than others among students with the same family income.'

Despite these concerns, it is evident that once the variables fees are introduced in 2006, English higher education institutions will be receiving significant additional amounts of income. The Higher Education Policy Institute has estimated they will get an extra £1.4bn a year by 2010 from top-ups. By contrast, in 2005/06 total full-time undergraduate fee income in England (excluding non-European Union overseas students) will be £0.9bn.

This has been having knock-on effects throughout the UK. In April, legislation was passed to enable Northern Ireland's higher education institutions to bring in the same top-up fee regime as in England. Later in the same month, the Scottish Parliament approved legislation that will allow the Scottish Executive – provided Parliament agrees – to set higher fee levels in specific subjects to protect the interests of Scottish students. Any increased fees will supplement the Executive's generous levels of recurrent funding for higher education to 2008, designed to keep Scottish institutions competitive with English ones.

For Scottish residents studying in Scotland, the graduate endowment remains. For students in Scotland who are domiciled elsewhere, the present tuition fee regime stays in place (£1,175 in 2005/06) for the time being, but the Executive is now consulting about raising general fees to between £1,700 and £1,900 from 2006.

On courses in Scotland where top-up fees are introduced – perhaps to a level of £3,000 – Scottish-domiciled students will have their fees paid by the Executive. Medicine in Scotland is the leading contender for top-up fees, given the particularly high proportion of UK-domiciled non-Scots on these courses. The Executive is also consulting on the future level of medical course fees.

Wallace says (despite Wales not having top-up fees): 'The introduction of variable top-up fees in the rest of the UK has created a situation that requires a response. Doing nothing is not an option. Recent figures suggest that demand for places from the rest of the UK is already increasing in anticipation of variable top-up fees. To ensure that Scottish-domiciled students continue to have fair access to study in Scottish universities, Scottish ministers have had to act.'

The Welsh Assembly has been somewhat less proactive. Any decision on introducing variable top-up fees has been shelved until after the next elections to the Assembly in 2007. In the meantime, Education and Lifelong Learning Minister Jane Davidson has promised additional supplementary income in 2006/07 to try to keep Welsh institutions competitive.

That decision is likely to be strongly influenced by the final report of the Rees review – expected at the end of this month. The interim report proposed six options, ranging from maintaining the current fixed fee levels to maximum variable fees of £3,000 for non-Welsh and £2,000 for Welsh students. The Scottish option – of fees replaced by a graduate contribution – was not on the table.

Rees commented: 'Higher education operates in a UK and indeed global market. Students, staff and research funding cross borders in pursuit of quality. It is essential Wales is not disadvantaged.'

Stephen Court is senior research officer at the Association of University Teachers

PFmay2005

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