Top universities should be 'free to charge higher course fees'

Britain's most prestigious universities should be allowed to charge higher fees for their courses, the leader of the country's university vice-chancellors says today.

In an interview with The Independent, Professor Steve Smith, president of Universities UK and vice-chancellor of Exeter University, says he would like to see "more of a market" in university fees.

His comments come just a month before the publication of a long-awaited government inquiry into student finance by the former BP boss Lord Browne.

In his interview Professor Smith says: "I would like to see more of a market develop out of this... Most vice-chancellors accept the need for this."

His comments reflect a growing realisation among those close to the inquiry that an era is ending and major changes are afoot in the fees system used by universities.

At present, they can charge top-up fees of up to £3,225 a year per student, and almost every university charges the maximum.

Research shows that most students consider it unlikely that increasing the ceiling to £5,000 would lead to universities charging differential fees.

However, it also suggests that students would be reluctant to sign up to courses at some universities if the cap were to be lifted to £7,000.

So far the inquiry team has kept its cards close to its chest over its final recommendations. However, its members are thought to increasingly favour allowing elite universities to charge more.

This could be done either by lifting the cap for specified universities – or by lifting it for particularly popular courses such as law and medicine.

The inquiry is expected to report early in October. This will allow time for ministers to consider its proposals before finalising the comprehensive spending review, which is expected to recommend sweeping cuts in public spending.

Professor Smith told The Independent: "I don't believe this bullshit that there are a small number of elite universities who will charge what they like. The charge has to be internationally competitive to maintain UK higher education's position in the world."

However, he added: "I think universities should be able to charge differential fees because they're offering different experiences."

Professor Smith was reluctant to discuss figures, but he said that talk of £20,000 a year for some courses was "completely ridiculous".

The Browne inquiry's findings could provoke a major split in the Coalition Government. In the agreement it published on taking office, Liberal Democrats were given the freedom to abstain in any vote on raising fee levels.