Philip Augar: ‘Negative grants’ could target ‘over-supplied courses’

Universities that provide “over-supplied, low-cost courses” should be required to pay back money to the government, which could be redirected to “high-cost priority subjects”, the former chair of England’s post-18 education review has suggested.

Writing for Times Higher Education, Philip Augar said he no longer believed annual tuition fees for arts and humanities undergraduate degrees should be cut to £7,500, as he had proposed in May 2019, owing to the financial impact of the coronavirus crisis.

“Such a fee cut would be too destabilising in the short term given the threat to high-margin overseas student income,” wrote Dr Augar.

A “softer version of the fee cut would be to extend the current freeze [of the £9,250 annual fee] and to increase the teaching grant for strategic subjects by more than inflation”, he said. This approach, he added, would “reduce the real value of fees over time and give the state a measure of control over where its subsidy lands”.

Other more radical options to “achieve funding differentiated by subject while preserving uniform tuition fees”, however, could also be examined by the government, explained Dr Augar, who was commissioned by Theresa May in February 2018 to conduct a “wide-ranging review” of post-18 education.

A system of “negative grants” would involve “a payment back to government by universities offering over-supplied, low-cost courses”, said Dr Augar. “This ‘negative grant’ could then be redirected to high-cost priority subjects,” he said.

The government could alternatively impose a cap on student numbers in certain disciplines, suggested Dr Augar. “Confining this [cap] to certain courses and/or institutions would allow a measure of direction without reintroducing overall number controls,” said Dr Augar.

A package of higher and further education reforms is expected to be announced in the government’s next Comprehensive Spending Review this autumn, with ministers promising to tackle “low-quality courses”. Smaller changes to university teaching subsidies are more favoured given the sector’s current turmoil, THE understands.

However, such measures are required, he explained, because they would limit the amount written off by the Treasury in unpaid tuition fees, particularly for some subjects, such as media studies and the creative arts.

“This is serious money: £12 billion in total and likely to rise with the demographic bulge and deteriorating economy,” said Dr Augar, adding that “there is a misalignment between the state subsidy and the economy’s needs”.

Change was required because there were “signs that the dividend from university expansion, as currently delivered, had played out”, he continued.

“I do not for a moment imagine that these proposals will be welcomed by the sector, but surely enough is enough,” said Dr Augar. “These proposals would respect academic autonomy and research excellence while working in students’ best interests,” he said.

 jack.grove@timeshighereducation.com