9 December 2010
The respected Institute for Fiscal Studies has backed the government’s plans to reform the university tuition fees system, but added that concessions to poorer students have built some perverse incentives into the proposals.
In a briefing note ahead of today’s crunch Commons vote on the issue, the think-tank said the scheme drawn up by ministers was ‘more progressive’ than both the current system and the recommendations of Lord Browne’s review.
This represents a significant shift in position for the IFS, which last month declared the government’s proposals to be beneficial to the highest earners and elite universities.
Now the institute says that, compared with either Browne’s proposals or the existing arrangements, the highest earning graduates would pay back more and the lowest-paid would pay back less.
When parental income is taken into account, the coalition’s plan is better for people from poor families than Browne’s – but both proposals are more expensive to deprived students than the current system.
The IFS adds that plans to partially exempt students who had qualified for free school meals, as announced over the weekend, would give top universities an incentive to turn away the least well-off candidates.
This is because the government is proposing to fund a year of tuition for all FSM students at all universities – but will require elite universities, which will be able to charge up to £9,000 per year, to fund an extra year of study themselves.
The IFS also said that the new system would be less transparent than the current one or Browne’s proposals, as it is more complex than both.
However, the government’s proposals were dealt a new blow today by research released by the Universities and Colleges Union.
The analysis casts doubt on whether any university would be able to afford to charge fees as low as £6,000 a year, warning that an average annual fee of £6,863 would be needed to plug the gap left by public spending cuts.
Institutions focused on the arts are set to lose all their government funding, and will need to charge as much as £7,700 a year to break even, the UCU said.
General secretary Sally Hunt said: ‘Government claims that universities will only charge more than £6,000 a year in exceptional circumstances are completely bogus when one scratches at the surface of the plans.’
