The claim
“It is the Office For (Fair) Access that will decide whether or not they can go to that £9,000 threshold and very tough rules have been published and placed in this house for people to see”
David Cameron MP, Prime Minister’s Questions, March 30 2011
The background
Ed Miliband reminded the government today of its promise that universities will only be allowed to charge £9,000 tuition fees in “exceptional circumstances” – such as high teaching costs.
It’s a promise that was derided by the president of the National Union of Students earlier this year, who aired suspicions that as many as 70 per cent of universities will charge the full whack.
“From the conversations I’ve had behind the scenes, universities believe that the price they set will be a sign of quality – and they will charge whatever they can get away with”, Aaron Porter told the BBC.
The analysis
The NUS president could be right. Mr Miliband said in today’s PMQs that 18 of the 23 universities that have set their fees to date, plan to charge £9,000.
That’s an 80 per cent rate already – and includes the high flying likes of Oxford and Cambridge, alongside the less revered Reading and Essex universities.
Only a handful are charging less than £9,000 – with former polytechnic Leeds Metropolitan this week announcing it would charge as much as £8,500. Two years ago, Leeds Met was the only higher education institution in England offering a substantial discount on fees, charging £2,000 a year.
It is worth remembering there are some 200 universities in England, but the initial signs are worrying.
The PM insists that setting fees is a matter for the Office for Fair Access to decide. Rather worrying then, that the Offa’s own director has denied responsibility.
Sir Martin Harris said at a conference in London last month: “The Treasury made assumptions…they thought that Offa was going to be in a position to have legal powers to impose certain fee levels.
“How they came to that view I cannot say because it was obvious to me from Day One that (Offa) didn’t (have the authority). Now the government is in some difficulty in limiting expenditure to the levels that the Treasury has assumed.”
Indeed, a spokesman for the Department for Business, Innovation and Skills (BIS) confirmed to FactCheck: “Universities set the fees they would like to charge”.
And Offa told FactCheck: “Offa is not a market regulator or pricing mechanism. Our job is to assess each access agreement on the basis of Ministers’ guidance to us and our guidance to the sector.”
Offa’s role then is not to decide on the fees, but to decide – as Mr Cameron says above – on the “very tough rules” that higher education institutions must adhere to in order to charge above £6,000 in fees.
These rules – or “access agreements” – are put in place to ensure that poorer students aren’t priced out. They cover bursaries, summer schools, outreach programmes and so on.
The BIS spokesman added: “Offa have the power to not approve an access agreement if they do not feel it is sufficiently stretching. Without an access agreement in place the university could not charge more than £6,000.”
But how tough is Offa? An Offa spokesman told FactCheck that since it was set up in 2002 it hasn’t flexed its muscles once. Not one university’s fee proposal has been refused.
And how powerful is Offa? In February The Guardian reported that 13 of the 16 Russell Group universities didn’t meet current benchmarks.
There was talk from the coalition of £500,000 fines; but none have been imposed.
The verdict
Offa has in the past proved to be rather toothless. So with the new fees system untried and untested, it’s little wonder Offa’s director is flagging policy chaos now.
The fees market appears to be veering out of control even at this early stage – with both Oxford, our number one ranked university, and Reading, number 31, planning to charge £9,000 in fees.
The government originally budgeted for an average fee of £7,500 – if that climbs, then it won’t have enough money to pay the universities. (Remember, students wont pay the money back for years).
Without the power to impose lower fee levels, either the government will foot the bill – or the universities will.
And as Offa’s Sir Martin rued last month; “in the end, the Treasury always wins”.
By Emma Thelwell
