Universities told they may have to cut fees or merge to survive

Universities that were planning to charge the maximum £9,000 tuition fee may slash student numbers or be forced to cut their fees, according to the head of the UK organisation for vice-chancellors.

Professor Sir Steve Smith, the vice-chancellor of Exeter University and president of Universities UK, the body which represents vice-chancellors, said: "The fee for 2012 doesn't have to be the fee for 2013."

He believed there were several reasons why so many universities – about two-thirds of those in England – had sought to charge the maximum fee.

"I think it might be a sort of status thing: 'If I don't charge £9,000 am I going to be considered second-rate?' Some may want to use this as an opportunity not to be as big as they are now. They may, say, want to take in 3,100 high performers at £9,000 rather than the 4,000 they currently take in. Institutions are planning a bit for the future."

A long-awaited White Paper on the future of higher education – expected to be published this week – will seek to torpedo the idea that universities could cut their fees during clearing next year if they find they do not have enough applicants to fill places.

David Willetts, the Universities Minister, had earlier warned that some universities might have to cut their fees or offer inducement to students to fill their places. However, he said that if a university did cut its fees during clearing, it should reduce them for those already enrolled as well.

Professor Smith said that would not apply in the following year, and therefore most universities would put off changes in fees structures until 2013 if they were having difficulty filling places.

He said he did not believe any universities would have to close as a result of a failure to attract students next year but did not rule out mergers.

"If you get no students one year, you've lost 33 per cent of your income," he added. "It would increase the financial pressure on the university but I don't think there will be closures."

There is some comfort for universities today, though, with new figures indicating that sixth-formers will not be put off applying as a result of the increase in fees.

Asked whether they were "very likely" or "fairly likely" to go to university. 78 per cent of secondary school children replied "yes" compared with 80 per cent last year. But the survey, undertaken by the education charity the Sutton Trust, also revealed scant knowledge of the tuition fees system.

Only 31 per cent of 11 to 16-year-olds said money would be borrowed from the government and paid back when they were earning more than a certain salary. A fifth believed their family would pay while one in 10 believed they would pay from money earned before they went to university.

The much-delayed White Paper, expected to herald the biggest shake-up since the Robbins report advocated expanding higher education in the late 1960s, will, according to some, outline plans to allow popular universities to expand student numbers by taking in any high flyer with two As and a B at A-level.

Meanwhile, fees for part-time students could rise to as much as £6,500 a year under the new system, it emerged yesterday. Gareth Thomas, Labour's universities spokesman, warned that the rise could discourage many mature students – particularly from disadvantaged backgrounds – from applying.

More open universities

Key proposals in the White Paper include:

* Allowing popular universities to expand and take in any student with two A grades and a B at A-level.

* Allowing universities and colleges of higher education that charge lower fees to expand.

* Promoting student charters that guarantee lecture class sizes and contact time with tutors.

* Giving wider powers to OFFA, the university access regulator, to fine universities which fail to attract disadvantaged youngsters.

* Compelling universities to be more open about what A-level subject passes are needed for a particular course and to reveal the employment records of their undergraduates.

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