UK: Undergraduates should pay more

Student fees will have to rise if Britain is to keep its world-class reputation in higher education, the Russell Group of 20 elite universities has warned.

In its submission to Lord Browne's review of higher education funding, the group predicts its members could be faced with an overall deficit of more than £1.1bllion (US$1.6 billion) by 2012-13. But it does not recommend a big increase in overseas student fees.

In a 46-page submission to the cross-party review, commissioned by the outgoing Labour government, the Russell Group says universities will be forced to make significant cost reductions. It says these are likely to involve reducing staff numbers and cutting back on investment in vital infrastructure.

In the absence of additional funding, these measures could result in a serious impairment of the student experience and jeopardise the long-term quality of higher education delivered, with serious consequences for students, employers and wider society.

"An increase in graduate contributions is the only viable and fair way to secure the future of the UK's world class higher education system and the universities' vital role in educating a workforce for the global economy," said Wendy Piatt, Director General of the group.

Members of the group, which includes Oxbridge, London, Leeds, Sheffield and Warwick universities, say the current funding system does not allow research-intensive universities access to sufficient resources to remain internationally competitive.

According to recent OECD data, the UK's annual expenditure on higher education is lower than most other OECD countries in terms of a proportion of GDP per capita, expenditure per student, and as a proportion of total education funding. The UK spends approximately $11,484 on each student while the US spends $22,476 and Australia $13,959.

Relative to GDP per capita, Australia spends roughly 25% more per student and the US 50% more. The UK spends just 1.3% of its GDP on higher education and is outpaced not only by the US and Australia but also by Canada, Korea, Japan and even China.

The group says that fees paid by international students have become an increasingly important source of income for UK universities in recent years. There have been suggestions that increasing income by raising overseas student fees might make up the shortfall in public funding.

But the scale of deficit is such that eliminating it would require a yearly increase of more than 200% in income from international students.

"Even the most optimistic projections on international student income would fall far short of this level," the submission says. "Russell Group universities might be able to increase revenues by raising fees from international students, but pushing such a strategy too far could be risky, endangering the reputation of UK universities overseas and ultimately placing in jeopardy the stability of the UK international student market."

Aaron Porter, president-elect of the National Union of Students, said removing the current fees cap of £3,290 for students starting courses this autumn would leave them with mortgage-style debts of £40,000.

A report of the Browne review is expected by the autumn. The new Conservative-Liberal Democrat coalition government has agreed to consider its findings before making any changes to the funding system.