30 January 2004
Student debt in England and Wales could top £8.5bn a year following the government's narrow Commons victory on top-up fees, preventing graduates from seeking public sector jobs, say critics.
New figures published by opponents of the Higher Education Bill, who this week vowed to continue the fight against the policy, indicate that postgraduates in London and the Southeast will be worst hit, with combined debts of £3.1bn a year by 2010.
Other areas where debt will escalate rapidly include the Northwest (£1.2bn), West Midlands (£940m) and Yorkshire and Humberside (£818m), figures released by the Liberal Democrats, indicate.
LibDem MP Paul Holmes, a senior member of the Commons' education select committee, told Public Finance that such debt would not only wreck graduates' finances, but also hinder the government's public sector reforms.
'The [select] committee's recent visit to America, which operates a similar fees system, was a real eye-opener. The best US graduates simply refuse to take up jobs in the public sector because they are lower paid and do not lend themselves to debt repayments. That is likely to be replicated in the UK.'
Meanwhile, rebel Labour MPs and opposition critics have vowed to continue their fight against the Bill, approved by just five votes amid dramatic scenes on January 27.
Most Labour critics oppose plans to allow universities to charge variable fees up to £3,000 per year, claiming it will create a market for students within which elite institutions will thrive at the expense of 'cheaper' universities.
The Coalition of Modern Universities, the former polytechnics that critics believe will suffer under the 'two-tier' system, said five 'mitigating' measures should be added to the Bill, including one to reduce income differences between 'old' and 'new' establishments.
In the pre-vote discussion, Education Secretary Charles Clarke had reiterated that universities faced 'real and substantial' financial problems – the government estimates the backlog in infrastructure funding alone to be £8bn.
Questions remain, however, over what deals ministers may have agreed with backbenchers in order to prevent a defeat.
Former chief whip Nick Brown, regarded as the lead rebel before he voted with the government, indicated he had been told the forthcoming Spending Review would make cash available to fund recommendations from an independent review of fees.
But a spokeswoman for the Department for Education and Skills said: 'There were no further concessions, of any sort, made in the run-up to the vote.'
PFjan2004
