Should Labour raise fees to save struggling universities?

Bridget Phillipson, secretary of state for education, is one of the new cabinet’s more assured performers – a figure who epitomises the pragmatic and serious intent of this Labour government.

- SEAN O'GRADY

From what’s been seen of her in action thus far, she does not seem to panic easily. Nonetheless, a looming crisis in universities may prove to be the country’s greatest financial mess since the post-Ukraine energy price shock.

What’s happening in universities?

English universities are running out of money and are looking to the government for assistance (those in Scotland, Wales and Northern Ireland are overseen by the devolved administrations, but may face similar problems). Tuition fees for “home” (ie UK) students have been frozen since 2017 with a cap of £9,250pa. In the intervening period, inflation has pushed costs much higher – wages, energy, land for new buildings – while higher interest rates may have added to pressure on those with outstanding debts.

There is a limit to how far any shortfalls can be made up through efficiency savings or higher fees for overseas students. Indeed, the prospect for increasing the numbers of lucrative undergraduates recruited from the likes of China, India or Nigeria is an uncertain one given the intense political pressure to reduce migration. This autumn has seen home student numbers at a record high, and those from abroad coming down.

What do universities say?