The package will mean projected cuts of 2.7 per cent in university spending for next year will be kept to under 1 per cent, according to Baroness Blackstone, the higher education minister.
Universities have been urging the Government to let them keep tuition fees of pounds 1,000 a year per student to be introduced from next year and amounting to around pounds 150m in total. Ministers yesterday would give no guarantee that they would in future be able to keep the income. A fundamental review of all public spending is being carried out across Whitehall. But vice-chancellors welcomed the package as a step in the right direction.
Mr Blunkett said the extra money would help to improve poorer students' chances of going to college. "It ensures that universities do not face planned cutbacks, while at the same time enabling more people to benefit from higher education."
The new funds include pounds 125m to raise standards and to make a start on the backlog of building maintenance and equipment replacement, estimated by researchers at around pounds 400m. There will be a further pounds 4m to allow an extra 1,000 students to receive higher education through sub-degree programmes.
Part-time students and those facing particular hardship will benefit from an extra pounds 36m, which will abolish means-testing for disabled students and introduce a pounds 250 hardship loan.
Around one-third of students will not pay any fees because they come from families with gross incomes of less than pounds 23,000. A further third will pay part of the fees.
Under the new arrangements, graduates will repay their loans over a longer period than at present. For those starting university next autumn the starting point for repayment will be an income of pounds 10,000. Those earning pounds 17,000 a year will repay pounds 52 per month compared with up to pounds 129 per month now.
Professor Martin Harris, chairman of the committee of vice-chancellors, pointed out that Sir Ron Dearing's report on higher education published in July said that universities faced a funding shortfall of pounds 350m for next year. He said: "We welcome the Government's recognition that money from student contributions to tuition fees must be invested in higher education. There is still an urgent need for further investment in our universities if students are to get the teaching they deserve."Reuse content