Student finance isn’t working, Theresa May admits as she launches major review

Theresa May will admit that the current system of tuition fees is no longer working as she delivers a major speech pledging to overhaul post-18 education with a review of the entire system.

In an attempt to defuse the political damage inflicted on the Conservative Party since 2010 over the toxic issue of trebling tuition fees with younger voters across England, the Prime Minister will say that the system of variable fees has not resulted in the “competitive market” originally envisaged.

Instead, Ms May will accept: “We now have one of the most expensive systems of university tuition in the world.”

Setting out details of a long-promised government-led review into post-18 education – due to conclude in early 2019 – Ms May will outline how she also aims to break down the “false boundaries” and warn against the “outdated attitudes” that favour academic over technical qualifications.

Supported by an independent chair and panel, it is expected that the review will look at all aspects of student funding, such as cutting or freezing tuition fees, as well as the contentious issue of interest on loan repayments, which stand at up to 6.1 per cent.

But in a frank acknowledgement of concerns across the country over the higher education system and the growing debt burden facing young people, Ms May will add: “The competitive market between universities which the system of variable tuition fees envisaged has simply not emerged.

“All but a handful of universities charge the maximum possible fees for undergraduate courses. Three-year courses remain the norm. And the level of fees charged do not relate to the cost or quality of the course.”

And in her clearest hint yet that scrapping the maintenance grants – a policy announced by George Osborne in 2015 – was a blunder, the Prime Minister will note that the Government’s goal of making university accessible to young people from every background “is not made easier by a funding system which leaves students from the lowest-income households bearing the highest levels of debt”.

Ms May will add that the review “will examine how we can give people from disadvantaged backgrounds an equal chance to succeed” and “that includes how disadvantaged students and learners receive maintenance support, from both government and universities and colleges”.

The issue of university finance has become a key political battleground since the general election, with the Conservatives struggling to win over younger voters from Jeremy Corbyn’s Labour Party, which has has promised to abolish fees and bring back grants for poorer students.

A study published last year by the economic think thank the Institute for Fiscal Studies – before the Government announced a fee freeze at the Tory party conference – calculated that fees of £9,250 and interest rates of up to 6.1 per cent would mean that the average student would owe more than £50,000 on graduation.

Ms May’s speech also comes after Damian Hinds – appointed as Education Secretary during January’s reshuffle – indicated tuition fees should be based partly on how a degree course could benefit a student’s future career.

But speaking on Sunday, his predecessor Justine Greening, who dramatically left the Government in January after refusing to switch cabinet posts, said such a system could inadvertently harm social mobility and urged ministers to reintroduce maintenance grants for the poorest students.

The former cabinet minister also gave the review a lukewarm reception, adding that while she was in Government she was determined not to kick the issue of university funding into the “long grass” and “spend time looking at things instead of taking action”.

During the speech in Derbyshire on Monday, Ms May will add that one of the “greatest social achievements” of the last half-century is the transformation of academic education from “something enjoyed almost exclusively by a social elite into something which is open for everyone”.

But she will say that the review will aim to break down “false boundaries” in the post-18 system and urge people to “throw away” an “outdated attitude” that she claims favours academic over technical and vocational qualifications for young people.

Ms May will add: “For those young people who do not go on to academic study, the routes into further technical and vocational training today are hard to navigate, the standards across the sector are too varied and the funding available to support them is patchy.

“So now is the time to take action to create a system that is flexible enough to ensure that everyone gets the educations that suits them.“

Returning to the sentiments expressed in her first speech as Prime Minister on the steps of Downing Street in July 2016, Ms May will say “we can build a country that truly does work for everyone”, adding: “A country where your background does not define your future, and class distinctions are a thing of the past.

“Where a boy from a working-class home can become a High Court judge, thanks to a great state education. And where a girl from a private school can start a software business, thanks to a first-class technical education. That is my vision for a fairer society and how we will deliver it. A society where good, rewarding work is available for everyone.

“Britain as the great meritocracy, a country that respects hard work, rewards effort and industry, where a happy and fulfilled life is within everyone’s grasp.”