4 March 2011
Changes to student finance will mean tougher powers are needed for the Higher Education Funding Council for England, the National Audit Office has said.
In a report published today, the watchdog said that shifting the balance of university funding from public support to student fees would increase the risk faced by higher education institutions.
Hefce was, ‘unlikely to be able to support a more substantial caseload without either stronger powers to intervene or more regulatory resources’, the NAO said.
The report, Regulating financial sustainability in higher education, revealed that there were 25 universities operating below at least one of Hefce’s financial benchmarks even before the switch to fee income made their finances less predictable.
Hefce might need wider powers ‘to protect the interests of taxpayers and students’ and the government should consider what these should be, it said.
Public Accounts Committee chair Margaret Hodge concurred. She said: ‘Moving to the new funding arrangements will potentially increase the risk of institutions at “high risk” of failing, as they compete for income. A new type of regulatory framework will be required.’
Hefce chief executive Sir Alan Langlands said any new regulatory framework needed to respect the autonomy of universities and colleges ‘while ensuring these organisations continue to be responsible for the use of public funds and provide value for money’.
Sally Hunt, general secretary of the University and College Union said: ‘This report lifts the lid on the real financial health of higher education and the likely consequences of the government’s proposals.
‘If the government is happy for some universities to go to the wall, then it should be upfront about it. We believe that our universities do an excellent job and letting them fail would be an act of academic barbarity.’
The NAO report praised Hefce’s record, pointing out since its formation in 1993 ‘there has been no disorderly failure of an institution’.
In July 2010, there were 7 bodies on Hefce’s ‘at higher risk’ register, up from an average of 2.7 years in 2006. One, Thames Valley University, had been on the register for 12 years.
