University challenge: Funding is far from perfect, but it is too soon for another debate about fees

The Vice-Chancellor of Oxford University is getting way ahead of himself

With the furore over the introduction of £9,000-a-year university fees still so recent, politicians might expect to be spared another round of controversy on the subject. They would be wrong, however. But the latest brickbats are not from prospective students or campaign groups, they are from one of Britain’s most prestigious educational establishments.

According to the Vice-Chancellor, Oxford University’s “world-class education system” is being jeopardised by a shortfall of £70m in annual income from undergraduate teaching. Because of the cap on fees, a service that is costing almost £16,000 per student per year to provide is only bringing in £9,000.

There is some sense in Professor Andrew Hamilton’s argument. He is right that it makes little sense for all universities to be charging the same, regardless of the quality or quantity of teaching that they offer. He is also right to point out that £9,000 does not cover the costs of our best institutions, which risks eroding standards. And he is right, too, that there is room for a debate about the extent to which market principles should be applied to the tertiary education sector, given the hybrid nature of the current arrangements.

But the Vice-Chancellor is way ahead of himself, nonetheless. Not because there is any inalienable argument against  some institutions putting up their fees. Nor because his pledge of extra measures to ensure that the less well-off do not miss out is not to be believed. Fees need not, after all, penalise poorer students, given that there is no up-front cost and repayment does not begin until the graduate is earning more than £21,000 a year.

The problem is that, after barely more than 12 months, the current arrangements have simply not been in place long enough to evaluate them sensibly. It is possible, for example, that some less illustrious universities may be forced to drop their prices, if prospective students begin to vote with their feet. Equally, it is not yet certain what effect higher charges have had on applications. The first intake, in September 2012, may have been markedly down, but this year’s numbers were back to normal.

Until it is clear how the existing scheme is working, then, there can be little meaningful discussion of changes to it. And there is also the politics to consider. No party will be willing to engage in a discussion of this type ahead of the next election, and quite possibly not afterwards either.

The good news is that there may not be the hurry that Professor Hamilton implies. Oxford’s shortfall did not start with £9,000 tuition fees and the concomitant fall in state funding; the university was not receiving £16,000 per student before either. If the gap has been filled so far, it can continue to be, for the near future at least. That is not to say that the debate about university funding is not needed. Just that it will not happen soon.