By Richard Johnstone | 27 May 2013
Higher education funding should be reformed to protect universities from an ‘avalanche’ of government cuts, the Institute for Public Policy Research said today.
Among the changes called for by the think-tank’s Commission on the Future of Higher Education is the creation of a new kind of degree, where students pay less for tuition but receive no additional state support.
The eight-member commission, chaired by Warwick University vice chancellor Nigel Thrift, estimated that universities face a £1.2bn cut in Whitehall funding from 2015 to 2020.
Publishing its recommendations ahead of the report’s full launch next month, the group said long-term reform was therefore needed to protect the sector's contribution to economic growth.
It calls on ministers to cap, at current levels, the proportion of 18- to 21-year-olds enrolled in full-time undergraduate courses that cost up to £9,000 a year. There are currently approximately 270,000 undergraduates in that age group, and a freeze on numbers could save as much as £3bn over the next seven years.
The report has also called for a new £5,000 ‘fee-only degree’ to be created for students who live at home or who work part-time. Students paying this rate would not be eligible for maintenance grants and loans, meaning the government would save around £10,000 per student, but the lower rate would enable a ‘low cost expansion’ of university places.
The commission concluded these reforms would allow the government to protect spending on science and research in next month’s Spending Review, and introduce real-terms increases in science funding after 2017/18. These areas should be prioritised because they are crucial to driving economic growth. Universities’ science and research budgets must remain ring-fenced to ensure they are used for this purpose, the commission added.
Thrift said the commission appreciated higher education had 'to play its part and find its fair share of deficit reduction’, but stressed that the work universities and colleges did to promote growth must not be swept away.
He added: ‘We are going to need to make major cost savings in the short-term, as well as grapple with longer-term arguments about the future of fees. The only way we will be able to afford to expand the number of students is if we offer a new type of degree.
‘The current funding system privileges full-time residential courses supported by student loans. But this is not appropriate for many potential students, who want to study vocational courses in their local area, live at home and combine their studies with paid employment. So universities and colleges should be able to offer a new £5,000 fee degree, focused on vocational learning and offered to local students who would be eligible for fee loans but not maintenance loans or grants.’
