According to one English university, contracts with existing students that prevent changes might lead £2.5m less income.
Some English universities could miss millions of pounds from the increased tuition fees because some contracts with students don’t permit changes in terms and conditions.
The government has finally heard the cry of UK universities and announced that undergraduate tuition will be increased to £9,535 a student per annum. UK undergraduate tuition fees have remained unchanged for the past eight years.
According to the government, the increment will apply to fresh students starting university next October and those in their second and third years.
However, the Department for Education has acknowledged that some universities cannot apply the new rates to existing students if their contracts don’t permit it. According to one vice-chancellor, it would result in a difference between an additional £1.5m and £4m.
Vice-chancellors believe that even if the new rates are applied to both fresh and continuous students, the income generated will settle the rise in National Insurance Contributions (NICs) announced in last week’s budget.
They argue that the tuition fee increment will do more than enable them to stand. However, certain financial policies continue to eat away their income, leaving many universities in financial difficulties.
Bridget Philipson, the education secretary, stated that she wants universities to provide more assistance to less privileged students so that they can access and stay in higher education. Philipson wants efficiency savings such as higher teaching standards and better value for money for students, including a crackdown on vice-chancellors’ pay rises and more work with employers to deliver skills.
The vice-chancellor of the University of the West of England, Prof Steve West, claims that he was checking if his institution could implement the new rates to continuous students. He added that if so, the £4m generated would cancel out NICs. However, if the rates only apply to fresh students, it would generate £1.5m.
He stated: “What we’ve got is still not a solution for sustainable funding for universities going forward. It’s the start of a conversation. What we’ve got is a one-year injection, not a long-term solution.”
The vice-chancellor of the University of Sunderland, David Bell, endorsed the secretary of state’s priorities. He said: “The question now is whether these priorities form part of a more substantial review of funding, given that yesterday’s announcement was never, in my view, intended to be a fix.
“I now think the time is right for such a review, as the government is clearly interested in thinking about higher education for the long term.”
An analyst at Moody’s credit rating agency, Lénaïc Couderc, claims that the increment was positive for English universities. “However, we expect that the increase will be insufficient to offset the likely loss of international tuition fee income from recent visa restrictions, which were introduced by the previous government, and to reverse the erosion in operating margins after two years of significant inflation.’’
Wes Streeting, the health secretary, added that the fee increment was reasonable and proportionate. He stated: “I think the risk is if we didn’t put the fee price and the maintenance support up in line with inflation then students really would be sold short because the investment in their teaching wouldn’t keep up with rising cost pressures.”
