Post-18 funding review published

30 May 2019

Russell Group responds to the publication of the Post-18 Education and Funding Review Panel’s report to Government

Today’s report from the post-18 review panel led by Dr Philip Augar presents a detailed package of proposals to reform higher and further education funding. It will be up to the next Prime Minister and his or her Cabinet to determine the Government’s response. Three key principles should guide them:

First, the primary objective should be a sustainable funding settlement across higher and further education. Additional support for further education and lifelong learning is long overdue and the panel’s emphasis on boosting these routes is welcome. Equally, their report recognises the invaluable role universities play in our modern economy and is clear thatany reduction in undergraduate tuition fees should be fully compensated. Otherwise university students will suffer as the funding available for their teaching, equipment and services such as careers support is diminished.[1] Businesses will also struggle to recruit the graduates they need if investment is reduced and student places have to be restricted. The Government’s own Industrial Strategy predicts that 1.25 million additional graduates will be needed by 2024.

It is imperative the next Prime Minister provides students, businesses and universities with a cast-iron guarantee that, in the event of a fee cut, teaching grants will fully cover the funding shortfall and meet future demand for higher education places.

Second, the overall impact of any reforms to the student finance system must be fair and transparent. We welcome the panel’s call for maintenance grants to be reintroduced for the most disadvantaged students and for the removal of real interest applied to loans during study. We also welcome the panel’s recommendation to better communicate to students and their families the way the student finance system works and to move away from the language of “loans” and “debt”, which we have been calling for in our work with the Money Saving Expert to redesign the student loans statement.[2]

However, we are concerned that the overall impact of the proposed reforms will be to place a greater burden on graduates on low and middle incomes. Current student loan arrangements are broadly fair, with higher earners repaying more of their loans over the course of their lifetimes. The panel itself notes that its recommendations would result in lower and middle earners paying more for their degrees than under the present system, as they will need to start repaying earlier and for a longer period of time.[3

The comprehensive impact of these proposals on graduates of differing means must now be carefully assessed. The Government should proceed only with a package of reforms which enhances rather than undermines the progressive nature of student finance.  

Third, any funding settlement should continue to support a full range of academic disciplines. The panel is right to recognise the importance of proper investment in higher cost and strategically important courses, such as science, technology, engineering and medicine, which will be central to future UK growth and prosperity.[4] This is necessary for universities to continue delivering these high-level skills which the economy needs.

However, it is crucial that a comprehensive range of other subjects is also supported. Over half of students currently choose arts, humanities and social sciences degrees and these subjects are highly valued by business and public sector employers.[5] The cost of teaching these to a high standard needs to be reflected in any funding settlement. It is vital for the UK that these subjects are sustainable to teach and courses remain open to students. 

While it is right that, in the event of a fee cut, Government steps in to support high cost and “high value” subjects, we urge the Government to avoid deprioritising other disciplines which are vitally important to our economy, culture and society.

We hope the Government will now consult with a wide group of stakeholders including universities, other post-18 providers, student representatives and businesses to consider these detailed proposals. We remain dedicated to working with the Government to help find an outcome that truly supports UK higher education for the wider, national good. A vibrant higher education sector is an investment in our nation’s future.

Notes to editors:

1. If tuition fees are reduced from £9,250 to £7,500 without the lost income being compensated for, this would lead to a £1.8bn hole in English university budgets and a £550m shortfall for all Russell Group universities alone.
2. More details of this can be found here: https://www.russellgroup.ac.uk/news/revamped-student-loan-statement
3. See Figure 6.11 on page 180 of “Independent panel report to the Review of Post-18 Education and Funding”
4. Domestic fee and grant income is already well below costs for lab-based science, engineering and technology subjects and for other intermediate-cost subjects such as archaeology and the creative arts. We estimate that deficits for these subjects range between £1,170 and £1,440 per student on average for Russell Group universities, but can be significantly higher for some subjects and especially where teaching group size is necessarily small. Even if any fee cut were fully compensated for with additional grant funding back up to £9,250 for these subjects, existing deficits would remain.
5. Predictive analyses of future demand for skills in the UK labour market have shown that subjects which teach students to think critically and to have a broad base of knowledge – not just specialised skills in particular disciplines – will see an increased demand; a recent analysis commissioned by Pearson found class-room based subjects such as English language, history, philosophy and administration and management are all strongly associated with occupations projected to see a rise in workforce share. 
6. Modern foreign languages are also of strategic importance to the UK: a 2017 British Council report found “the UK has now reached a critical juncture where investment in upgrading the nation’s language skills is critical”

   Russell Group responds to the publication of the Post-18 Education and Funding Review Panel’s report to Government