Tom Wilson: Higher fees won't solve university funding woes

The Government received some bad news last week. The drive to get half of young people into higher education is failing. Far from rising by around 4 per cent a year to meet the target, applications are flat. That is doubly bad news for those who think charging students higher fees is the answer to funding problems. Young people are not beating a path to academe. Higher fees will mean even less chance of meeting the target.

The Government received some bad news last week. The drive to get half of young people into higher education is failing. Far from rising by around 4 per cent a year to meet the target, applications are flat. That is doubly bad news for those who think charging students higher fees is the answer to funding problems. Young people are not beating a path to academe. Higher fees will mean even less chance of meeting the target.

Nor are higher fees much of an immediate answer to funding problems. Estimates vary, but about £300m extra might be raised – at enormous cost in entrenching social division and hardly denting the estimated £10bn backlog. Harvard and the rest of America's Ivy League do charge high fees, but most of their income is from vast endowments. Some British universities could charge higher fees without losing applicants but they have small endow- ments, so that would not solve their problems. The remainder of our universities would simply lose customers.

Curiously, some ministers argue that costs are not much of a factor in student choice. A glance at application figures dispels that myth. In Scotland, where fees are deferred and poorer students get grants, applications are up by 6 per cent. In the rest of the UK they are up by barely 2 per cent – mostly due to counting numbers not counted last year. Applications have been pretty flat since 1997, when fees were introduced and grants stopped. Admissions have risen but only because universities are taking a higher proportion of applicants. That means more middle class students because so few working young people apply in the first place.

Costs are not the only factor. For many rich students, higher fees might not matter. The problem is recruiting the less affluent. Applications will not start rising towards the 50 per cent target without some radical cost-cutting for the poorest. Deferring fees is one answer. Reintroducing grants is another. A third is writing off teachers' student loans over 10 years, something the Government introduced and that Natfhe argued for. The same write-off might be applied to other public services such as lecturing, research, the national health service, social work or the police. That would help to encourage applications.

But where are the billboards proclaiming this help or saying that fees are heavily means-tested? Few potential applicants understand that only one in three students pays the full fee. There is extra help for older and part-time students, but few know about it. Why is the Government so shy?

Evidently, ministers sincerely want to widen participation. But without radical change, applications will stay flat. Higher education will only advance towards the 50 per cent target by taking every applicant. And that will simply raise questions about quality and do nothing to increases the proportion of working-class students.

Higher education institutions need to play their part. Student demand will be stimulated by better supply – smaller classes, better resources, more added earning value, more attention to teaching and research and better information on choices. Those are the characteristics of popular universities and colleges. They explain why many small liberal-arts colleges in the US, without great research reputations, are sought after. Our esteemed universities, like those in the US, are better funded than the less esteemed. But money for teaching is what counts, not age or research reputation.

That is why the forthcoming spending review is so important. Raising fees will simply not raise the necessary cash. Yet if the Treasury gave higher and further education one-10th of the increased health service funding, the whole post-16 system could be transformed. Satisfied customers would generate more demand from their family and friends. Supply and demand would work together to reinforce a steady increase in applications. The Blair dream of half of under 30s going into higher education could happen – but only if Brown, not higher fees, provides the cash.

The writer is head of the universities department at the National Association of Further and Higher Education

education@independent.co.uk