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A tuition fee hike, or a link to inflation?

Julie Tam

Julie Tam

Assistant Director of Policy
Universities UK

There have been concerns expressed in the media this week around universities in England increasing their tuition fees. 

It is important to remember that this is limited strictly to an inflationary rise of 2.8% in 2017-18. The government's intention was announced back in July 2015, in the summer budget, which stated that the government was allowing 'institutions who offer 'high teaching quality to increase their tuition fees in line with inflation from 2017-18.' This intention was subsequently confirmed in the government's Higher Education White Paper. ​

Not allowing the fee cap to rise in line with inflation puts at risk the ability of universities to continue to deliver a high-quality learning experience for students. Since 2012-13, the £9,000 tuition fee has already been eroded by inflation, and is worth only about £8,200 in real terms; a reduction of 8% in fee income per student. Increasing the fee cap in line with inflation from 2017-18 in no way reverses this reduction, universities just have to live with this permanent decrease.  But it does stop further reductions - maintaining  the income that universities receive in real terms - as the chart below shows.     

Real term value of upper fee cap (2012-13 prices, RPIX)

FeeLevel.jpg


Therefore, increasing the fee cap in line with inflation is a very necessary action to take if universities are to remain financially sustainable, and the UK is to maintain its enviable track record of world-class, high-quality teaching.    

There are concerns that the impact of the inflationary fee increase will hit students hard or deter those from disadvantaged backgrounds from entering university.  It is important to remember that the analysis shows there is no clear evidence to suggest that the 2012 increase in fees to £9,000 have deterred young, full-time students from applying to university. There has been a steady increase in participation across advantaged and disadvantaged groups since 2012.  The fee increases may, however, have contributed to the decline in mature and part-time students applying.

A survey of over 3,000 students in 2015, was carried out as part of the independent Student Funding Panel's review of the student fees and loans system in England. This survey showed that a third of students said that should universities be faced with reduced resources, they would be prepared to see tuition fees rise slightly each year, in order to protect the institution's current levels of activity. The impact of Brexit on university resources is as yet unknown, but as we mention in a separate blog, it may sorely test the amount of money universities can invest in new teaching spaces and research facilities.

This is not to say that universities and policy makers ought to be complacent about the participation of more disadvantaged groups.  UUK's Social Mobility Advisory Group​ will be making recommendations later this year on how universities can improve access and long-term success for underrepresented groups in higher education. 

But it would be incorrect to say that the inflationary increase in the fee cap is not needed for universities, and that it would be harmful for students.  Both claims are untrue. In fact, no inflationary increase would not only impact on the financial sustainability of universities, but ultimately prevent students benefitting from all that the UK's universities have to offer.   

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Stephen Horscroft
Stephen Horscroft says:
25 July 2016 at 13:42

What is the motivation for young people to go to University? Over generations, some have said because they dont know what to do with their lives and the decision is delayed for three years. This may still be the case for at least some. The debt is postponed. Young people may be less worried about this than their parents, especially in our modern culture of debt not being an issue.

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