University fees - no rise before 2013
17 Mar 2009
So a majority of vice-chancellors (anonymously at least) want tuition fees to rise to at least £5,000. This is the first salvo in what will prove a long battle over whether to lift the current cap on fees.
The government has not yet even announced the start of its review of fees, which has to take place this year. Ministers are in no hurry. There will certainly be no decision to raise fees before the next general election.
Assuming Gordon Brown will not go to the country before spring next year, that will mean no decision on fees until well into 2010 at the earliest. And, even if the next government does decide to raise the fees cap to the £7,000 level that some feel is now necessary, it would still have to win the approval of both Houses of Parliament.
There would also need to be adequate time for both students and universities to prepare for a new fees regime. So, experts like the head of the Higher Education Funding Council for England, Professor David Eastwood, now believe there is no prospect of the fees cap being lifted before 2013.
The government is now likely to launch the review sometime this summer, giving it at least a year to report.
There is also a good chance that discussions will take place between Labour and the Conservatives to try to take the nature and remit of the review out of the political battleground.
This happened in 1997, when pre-election discussions between the political parties meant there was cross-party agreement to the Dearing Review, which was established by the Tories and which led to the introduction of undergraduate tuition fees after Labour took power.
While prospective students and their parents may welcome the fees cap staying in place for another four to five years, it means hard financial times ahead for universities.
Fear of a voter reaction is not the only reason for government reluctance to raise fees. The reality is that a fee increase does not get the government off the hook of higher public spending on universities. Quite the opposite, it will be a short-term drag on Treasury funds. That's because higher fees mean higher student loans. And, since the current loans are at a subsidised zero ‘real terms’ rate of interest, that is expensive for government.
One way out of this impasse would be for government to end the zero real-terms rate of interest on student loans. But that looks politically unlikely.