CSR 2010: Two brains, two caps? Fees decision ‘cannot wait’

In a speech at the Higher Education Funding Council for England’s annual conference in London today, the universities and science minister fleshed out the coalition government’s thinking following last week’s publication of the Browne Review and yesterday’s Comprehensive Spending Review.

Mr Willetts said that while the recommendations made by Lord Browne of Madingley’s landmark report required careful deliberation, “there are some decisions that can’t wait”.

Chief among them was the overhaul of fees, he said. “We need to set out in the next few weeks the way forward for graduate contributions and student support if we are going to have any chance of implementing changes for autumn 2012.”

Mr Willetts said that the Browne Review’s central proposition – that the bulk of the teaching grant be cut and replaced with fee income – was one that “Vince [Cable] and I both believe is the right way forward. It delivers a big saving in public spending – reflected in yesterday’s spending review – and reforms the financing system so that it is shaped by the preferences of students.”

Referring to the £2.9 billion cut to higher education funding announced by Chancellor George Osborne yesterday, he said that “by far the greatest part of that reduction flows from our acceptance of the approach presented by Lord Browne – that starting from 2012-13, we will start to reduce Hefce teaching funding”.

However, his speech did not address the likelihood that funding for the arts and humanities will bear the brunt of the cuts, while science, technology, engineering and mathematics (STEM) subjects will be protected.

During questions after the speech, Aaron Porter, president of the National Union of Students, asked: “Can I just get a direct answer that this is confirmation of the abolition of state funding for undergraduate teaching in the arts, humanities, and social sciences?

“Because the nature of the wording yesterday left a little bit of ambiguity but I’d just like the confirmation.”

Mr Willetts replied: “On what you call state funding, my view is that the funding remains but it flows in a different way. Students will be provided with the money, the loans to pay whatever are the graduate contributions that universities expect; the proposal in Browne is for a more generous maintenance package…It is still a very high level of public support but it goes in a different route.”

Under further questioning from reporters, he added: “The model that John Browne has proposed, which the coalition accepts, is that the basic teaching grant is in the hands of the student so the remaining teaching grant is indeed to cover the extra costs of [high cost] subjects.”

Mr Willetts also urged universities to look for savings in other areas, including pay and pensions, procurement and shared services.

Acknowledging that “people in this room will have anxieties about the shift in spending”, he said that “there is no option of carrying on as we are”.

While money could have been saved by reducing the unit of resource or cutting student numbers, “Browne’s considered approach actually shows a pathway towards a positive and viable future for higher education – a way through the ‘valley of death’ to which [Universities UK president] Steve Smith has often referred”, the minister argued.

Turning to the detail of Lord Browne’s proposals, Mr Willetts said that the government had not reached a final decision on the proposals relating to a fees cap or the possibility of a Treasury levy on fees charged above a certain threshold.

One option, he suggested, could be to set two caps, with those universities that opted for the higher level forced to meet strict conditions for widening access.

Afterwards, he added: “I did indicate in my speech that I don’t think it is sustainable or sensible to imagine a sort of ‘unlimited’ fee cap.”

On the proposal that a new “mega-quango” replace Hefce, the Office for Fair Access, the Office of the Independent Adjudicator and the Quality Assurance Agency, he said that while the coalition was “instinctively attracted” to the plan, “we need to tread carefully”.

However, he added that he would like to see the merger of Hefce and Offa.

Finally, Mr Willetts said that the government was “determined to manage the process of transition carefully”.

To this end, he said, the CSR “savings will be focused towards the second half of the spending period” (2011-12 to 2014-15).

He added: “I believe that higher education, as well as research, should be able to maintain overall levels of activity throughout this time of austerity…The reforms we undertake will improve higher education in the long run.”

john.gill@tsleducation.com