Higher Education: Funding

Lord Knight of Weymouth Excerpts

Wednesday 18th May 2011 Lords Chamber

Asked By

[Lord Knight of Weymouth]

To ask Her Majesty’s Government what is the latest estimate of the proportion of higher education courses charging £9,000 from next year; and whether the consequential cost to the Exchequer has been adjusted.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, 139 institutions intending to charge above £6,000 for any undergraduate course in 2012-13 submitted access agreements to the Director of Fair Access. Fee waivers and bursaries that universities plan to make available mean that we will not have firm cost estimates until students have received their loans late in the 2012-13 academic year. We believe that fee loans will be significantly below an average of £9,000. We will closely monitor the situation but currently expect the cost to be broadly within the Government’s estimates.

[Lord Knight of Weymouth]

I thank the noble Lord for that Answer. Back in December when we voted on this, we were told that the assumed average fee was £7,500 and that £9,000 would be charged only in exceptional circumstances. The House of Commons Library tells us that if the average fee goes up by just £400, the extra cost to the taxpayer through loan subsidy and underwriting will be £340 million. Therefore, I will try again with the Minister. It is clear that with more than two-thirds of universities saying that they will charge the maximum fee, £9,000 is not exceptional. If the assumptions were wrong, who will pay the extra cost? Will it be the national debt or students' prospects through fewer places?

[Lord Henley]

My Lords, as the noble Lord rightly said, we made the assumption in December of an average fee of roughly £7,500, with a 90 per cent take-up by students. However, it is up to higher education institutions to decide what application they should put in, and for the Office of Fair Access to look at that and make recommendations. As we made clear, there will be a number of bursaries and waivers, so we think that the average figure will come down well below the maximum of £9,000. I remind the noble Lord also that merely because a university puts in an application to charge £9,000 for one course, this does not mean that all courses will cost £9,000. I am afraid that the noble Lord will have to wait and see. As my right honourable friend Mr Willetts said in another place, we see no reason at the moment to amend the broad estimate that we put before the House last autumn.