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On thin ice: a five-year freeze at the maximum fee level will mean a real-terms cut in income, says David Eastwood

The chair of the Russell Group has warned that the £9,000 fee cap “will constrain quality” and that the probable five-year freeze at that maximum level will equate to a 16 per cent cut in tuition income for universities.

David Eastwood, who was a member of the Browne review panel, also said that the cost to the public of the new student support system would not have risen so high if the report’s recommendation for a levy on high fees had been introduced.

The fee cap warning is significant coming from Professor Eastwood, as the Russell Group has long been a vocal advocate of higher fees. But this is one of the group’s first public expressions of dissatisfaction since fees were trebled to £9,000 last year.

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Speaking at the Higher Education Policy Institute’s spring conference in London on 15 May, organised in partnership with the Higher Education Academy, Professor Eastwood said that under the new system, the resource for classroom-based subjects has “probably gone up by about £800 per student”.

However, he argued that funding for high-cost subjects has gone down in relative terms.

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Professor Eastwood, who is also vice-chancellor of the University of Birmingham, said: “The interesting thing is that, since the introduction of the £9,000 fee cap, it has not been raised. I am betting that it will not be raised until at least 2017, at the earliest.”

He added: “On the basis of my calculations, that means there’s going to be a 16 per cent real cut in the tuition income of institutions.

“That should put a stop to glib discussions about enhancement and improvement. We are managing pretty massive efficiency gains in the delivery of educational programmes over the next five years.”

With the 2015-16 spending review looming, suggestions have been made that the Treasury believes universities to be “awash with cash” and failing to take necessary efficiency measures - which could be a justification for further cuts.

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But Professor Eastwood said: “I think the fee cap will constrain quality. Universities in this country are incredibly efficient…there aren’t huge [additional] efficiency gains to be had.”

He added: “It’s important we don’t have glib presumptions and glib discussions about the efficiencies to be had from universities.”

Professor Eastwood also warned that “student support will probably be reformed again”.

Earlier during the conference, David Willetts, the universities and science minister, had confirmed that estimates of the taxpayer subsidy needed to support the new student loans system were rising. He revealed that the estimated resource accounting and budgeting (RAB) charge - the proportion of loan outlay that will never be repaid - was now at 35 per cent because of lower-than-expected wage growth.

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The Browne review proposed a levy on fees above £6,000, which Professor Eastwood appeared to argue would have kept loans, and the RAB charge, lower.

“We would not be where we are now if we had legislated for Browne [who] was well aware of the problems that would eventuate if you just had a simple fee cap,” he said.

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john.morgan@tsleducation.com