DfE study of English uni­ver­si­ties’ costs seen as path to fee cut

THE (Times Higher Education) - - NEWS - John.mor­gan@timeshigh­ere­d­u­ca­tion.com

The UK Depart­ment for Ed­u­ca­tion has com­mis­sioned ac­coun­tants KPMG to con­duct a study of how much it costs uni­ver­si­ties to teach their stu­dents, in a move seen by some as a po­ten­tial mech­a­nism to lower the tu­ition fee cap in Eng­land.

Uni­ver­si­ties tak­ing part in the sur­vey by KPMG were set a dead­line of 12 Oc­to­ber to pro­vide in­for­ma­tion on the costs of teach­ing un­der­grad­u­ates in dif­fer­ent sub­jects. The sur­vey asked uni­ver­si­ties for in­for­ma­tion based on their Trans­par­ent Ap­proach to Cost­ing (Trac) data on teach­ing.

A let­ter from the DfE invit­ing in­sti­tu­tions to take part says the work is to “fur­ther in­form” the re­view of post-18 ed­u­ca­tion fund­ing be­ing led by Philip Au­gar. “Build­ing on in­for­ma­tion al­ready col­lected as part of the Trac ex­er­cise, the study will ex­am­ine how tu­ition fee lev­els and in­sti­tu­tional fund­ing com­pare to the real costs of sub­ject pro­vi­sion; what vari­a­tion ex­ists across the sec­tor and be­tween sub­ject ar­eas; what causes the dif­fer­ences in costs in­curred and how this in­flu­ences in­sti­tu­tion de­ci­sions around pric­ing and sup­ply,” it adds.

The let­ter, from di­rec­tor of stu­dent fi­nance Matt Toombs, says KPMG would ini­tially seek to work with a small group of pi­lot in­sti­tu­tions be­fore the data col­lec­tion ex­er­cise was “rolled out more widely to all par­tic­i­pat­ing providers”.

The DfE may be seek­ing to add con­text and bet­ter re­fine the ex­ist­ing Trac data.

One se­nior fig­ure in the sec­tor de­scribed the KPMG costs study as po­ten­tially “enor­mously sig­nifi- cant”, and as hav­ing no pos­si­ble pur­pose other than to gather ev­i­dence for the low­er­ing of the fee cap.

“If you’re look­ing at op­tions for re­duc­ing the head­line fee, then hav­ing a view on what you think it costs to teach is part of your ar­moury,” said an­other sec­tor source.

Some sug­gest that the DfE could use the re­sults of the KPMG study to pro­duce a sec­tor-wide av­er­age cost across dif­fer­ent sub­jects, and on the ba­sis of that then lower the fee cap and of­fer stu­dents a guar­an­tee that they would “not pay any more than the cost of their de­gree” (based on those av­er­age costs).

Al­though vari­able fees have not pre­vi­ously been thought to be on the Au­gar re­view’s agenda, the KPMG study could also, in the­ory, sup­port a move to such a sys­tem, by pro­vid­ing the fig­ures for av­er­age costs of teach­ing across dif­fer­ent cour­ses and in­sti­tu­tions.

If the Au­gar re­view and the gov­ern­ment re­sponse did re­sult in a low­er­ing of the fee cap, the key ques­tion would be the ex­tent to which pub­lic spend­ing via teach­ing grant re­placed the lost in­come for uni­ver­si­ties.

In­creas­ing the level of teach­ing grant for high-cost sci­ence and en­gi­neer­ing sub­jects is seen as one po­ten­tial out­come by some in the sec­tor; an­other is rein­tro­duc­ing teach­ing grant for part-time stu­dents.

How­ever, the out­comes of the re­view by the Of­fice for Na­tional Sta­tis­tics of how stu­dent loans are treated in gov­ern­ment ac­counts are likely to be an im­por­tant fac­tor. With the ONS hav­ing said that its re­view will be de­liv­ered by the end of De­cem­ber, the Au­gar re­view has been de­layed and is now not ex­pected to re­port un­til late Jan­uary at the ear­li­est.

The ONS work could po­ten­tially re­sult in the fund­ing sta­tus quo ap­pear­ing more costly in terms of im­pact on the deficit than it does at present.

Nick Hill­man, di­rec­tor of the Higher Ed­u­ca­tion Pol­icy In­sti­tute, said that he would be “very in­ter­ested to see the KPMG work when it ap­pears, but we al­ready know the an­swer from Trac data”.

He ex­plained: “Uni­ver­si­ties spend al­most ex­actly what they re­ceive from home and [Euro­pean Union] fees, plus the teach­ing grant, on ed­u­cat­ing home and EU stu­dents. That is hardly sur­pris­ing be­cause uni­ver­si­ties re­spond to the level of re­source avail­able. If some­one tells them they have to teach for less, they will – but the ed­u­ca­tion will be com­men­su­rately worse.”

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