An update from the Vice-Chancellor
10 December 2010
The Vice-Chancellor summarises the immediate outcome of yesterday’s Commons vote on student fees as well as developments in higher education funding over the past year, and outlines the University's likely future position.
The lead up to and subsequent House of Commons vote on student tuition fees on Thursday 9 December has received considerable media attention and has led to much speculation and debate. This note summarises the immediate outcome of yesterday’s vote as well as developments in the higher education funding over the past year, and outlines our likely future position.
First, it is important to emphasise that regardless of the fees regime we eventually operate within, our mission remains unaltered. A very important part of this is to ensure that if an individual has the potential to benefit from an education at Bristol, their financial circumstances will not be a bar.
Turning to yesterday’s events, there were two votes in all. The first was on the proposed raising of the upper cap on fees to £9,000, from September 2012. This was passed by a majority of 21 votes. The second was on the proposal to raise the lower cap to £6,000 from September 2012. Again, this was passed by a majority of 21 votes.
To summarise some of the details of the new fees system:
- no fees will be payable up front
- the threshold at which graduates will start to repay their loans will increase from £15,000 to £21,000 and this threshold will rise annually with inflation
- each graduate will pay back 9 per cent of their income above that threshold and the debt is wiped out if it is not cleared within 30 years of graduating.
Yesterday’s vote gives greater clarity to the sector on the new fees framework overall. We now await the details of the White Paper, which is due early next year. As these details emerge, we can expect universities to decide on the level of fees they will charge. We are giving this matter very careful consideration and in doing so we want to ensure that Bristol is in the best possible position now and in the future. As one would expect, there is much speculation in the media as to the fees certain universities might charge. Our focus is to ensure that our decision is strategically driven with our eyes firmly focused on delivering the best possible student experience.
Given the scale of change the sector has faced over the past year, it may be helpful to summarise recent events to provide a broader context to yesterday’s announcement.
In December 2009, the Labour Government announced over £1 billion of cuts to the public funding of universities. Shortly after the election, the Government announced further immediate cuts of around £200 million to the higher education budget. This encompassed an £118 million reduction in previously announced additional 'modernisation' funding, together with an £82 million reduction in existing funding. Then, in June 2010, the Government announced an increase in VAT from 17.5 per cent to 20 per cent. This alone added an additional £1 million to £2 million per annum to our costs.
Following this, on 20 October, the Government unveiled its Comprehensive Spending Review (CSR). Significantly, it was announced that the overall budget for higher education, excluding research funding, would decrease from £7.1 billion to £4.2 billion, representing a 40 per cent reduction by 2014-15.
Within the CSR it was also announced that funding would continue to provide some support for the teaching of Science, Technology, Engineering and Mathematics (STEM subjects) and that the research budget for science would be maintained in cash terms, meaning a ring-fenced budget of £4.6 billion per year across the spending review period up to 2014-15.
The cuts have not fallen equally on the budgets within the sector and £3.2 billion will be cut from the £3.9 billion teaching budget – a fall of 82 per cent. This represents an unprecedented level of cuts to teaching funding within higher education and may well lead to no public funding of teaching in many subjects. It is clear that such cuts are unsustainable unless a new income stream is created.
As an individual institution and as part of the higher education sector, we have lobbied long and hard against these cuts, especially against their extent and the speed with which they are being introduced, but it is clear that the Treasury will demand the overall level of cuts set out in the CSR.
Lastly, on 3 November, the Government announced its proposals for university funding, following the recommendations set out in Lord Browne’s review, and the fee level elements of this were approved by Parliament yesterday.
Whatever one’s personal views on tuition fee rises, given the dramatic cuts faced by the sector, it seems clear that they will be needed to support a sustainable higher education system.
With regard to the financial situation at Bristol, much work has been done, and continues to be done, to reduce the University’s operating costs. The Academic and Support Process Reviews, along with the voluntary severance and early retirement schemes, are all contributing to ensuring that we are well placed to navigate this challenging financial landscape.
Now that we have most of the facts, work is under way to establish Bristol’s position and I, and senior colleagues across the University, are fully engaged in that process. There is much to consider, most importantly the issues of pricing and widening participation. Bristol has a long and proud history of widening participation in higher education. We will not abandon the principles that drive our widening participation activities, that is, equality of educational opportunity and the belief that a diverse student body is an essential component of a truly meaningful and high-quality student experience. We will, of course, inform staff and students as soon as we have made any decisions.
Meanwhile, it is important we remember the great strengths of this University, which are founded on the excellence of its students and staff. We will maintain this position of excellence for our current, past and future students as well as our staff to ensure that Bristol is well placed in the new higher education landscape and continues to be the institution of which we are all so proud.