Unions say education policy is in tatters after HEPI report slams government’s maths


The government has underestimated the cost to the public purse of its controversial changes to university funding, warns a report released today.

The report, from the Higher Education Policy Institute (HEPI), says optimistic assumptions made by the government over the average level of university fees and how much money it would get back from graduates’ salaries mean the actual cost will be much more than the government budgeted for.

The UCU said the report was further evidence that the government’s decision to hike up university fees was an ideological move, rather than a financial one, and will cost far more at a time when the government is preaching austerity.

UCU general secretary Sally Hunt said: “This timely report highlights the inaccurate assumptions and optimistic predictions made by a government determined to push through higher fees, rather than properly consider the financial consequences of the move.

“We warned at the time that fees close to £9,000 a year would be the norm and that the calculations for repayment by graduates were flawed. We take little pleasure in being correct, but it is clear now that forcing the burden of paying for university education onto students was an ideological move, not a financial one.

“This report highlights how lower earners are likely to see their salaries rise at a far slower rate than the top earners, which is another reminder that we really are not all in this together.”

NUS president Liam Buns said: “The government has told us these changes needed to be made to save money but despite the tripling of tuition fees their system costs the treasury billions more and creates even more instability for universities.

“In their rush to abdicate their responsibility for funding higher education the coalition got their sums badly wrong and have left a mess that will take years to fix.

“Higher education funding must be a key issue at the next general election and politicians of all parties must come together to recognise the public benefit it brings and the proper investment it requires.

ATL head of pay conditions and pensions Martin Freedman said: “The government’s higher education policy is now in tatters. Almost every assurance that the government has given about the new fees system has been shown to be false, from the predicted average fee levels to the amount of money that students would repay.

“Universities have had their funding reduced by 80 per cent and students have been faced with a trebling of fees, and all this pain has been for nothing. The government should apologise to all those students who have suffered so it can make an ideological point.”

The report challenges a number of assumptions made by the government including:

·         The average tuition fees is closer to £8300 than the £7,500 predicted by the government.

·         The average graduate salary in real terms 30 years after graduating will be £75,000 per year, far less than the government’s assumption of £100,000 – and still an extremely optimistic assumption given the nature of the world economy and the UK’s in particular.

·         The rate of salary increases will be evenly spread among all graduates – despite the fact that over the past 30 years highest earning graduates have increased their salaries very substantially whereas those earning the median or less have had very much more modest increases, if any at all.

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