‘Universities must reform’ says education secretary after first hike in tuition fees in 8 years

4 November 2024, 20:36 | Updated: 5 November 2024, 00:58

Tuition fee hikes are necessary to secure the future of universities, the Education Secretary has told LBC.

Ms Phillipson said the fee would rise to a maximum of £9,535 per year in a statement on Monday afternoon. Tuition fees had been capped at £9,250 since 2017.

She said the changes, in line with inflation were needed to secure universities' financial future. Maintenance loans for students will also increase.

Ms Phillipson told Tonight with Andrew Marr that raising tuition fees “was a difficult decision to take,” but that it was necessary to put universities on a more sustainable footing.

She continued: “Because the fee hasn't increased for such a long time, it's lost its real terms value. So, today doesn't restore that, but it does provide direct investment into universities in order to secure their long term future.

“But what I've also been clear about today is that alongside that investment must come reform.”

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The Conservatives said in response that Labour had "declared war" on students, while the university workers' union also criticised the move. The universities themselves said the fee hike was welcome.

The Education Secretary said the Government will be setting out further plans for the higher education sector and universities, which “should be driving economic growth”.

“But alongside that, what more needs to happen to open up university as an option for students from less well off backgrounds.”

She said the fee hike is the first step in Labour’s plan to reform the sector, and that she “wouldn't say for one moment that this is the end in terms of what's required,

“but it was a necessary step to make sure that our universities are put on a more sustainable footing.”

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She added: “I'm conscious that I want our universities to thrive into the future and it's no good for students if they increasingly find that the courses and choices for them just aren't there.

“I do want the fairer system overall for students.

Earlier, Ms Phillipson said the hike will not cost graduates more each month as they start to repay their loans.

Since 2017, tuition fees have been frozen at £9,250 per year with any increase expected to provoke an intense backlash, especially considering Sir Keir Starmer pledged to abolish fees when running to be Labour leader.

He later u-turned on this promise, claiming the country was in a "different financial situation.”

Higher Education minister Jacqui Smith told LBC's Tom Swarbrick that the decision to raise the tuition fee cap was "really difficult". She also claimed that the previous Tory government had "frankly ignored the needs of universities apart from to treat them as a political football".

Tory shadow education secretary Laura Trott told the House of Commons: "We had a Budget last week which declared war on business, private-sector workers and farmers. It seems today that the Secretary of State (Bridget Phillipson) wants to add students to that list.

"Not content with pushing up the cost of living for everyone with an inflationary Budget and pushing down wages with the national insurance increase, we are now in a situation whereby students will suffer from the first inflationary increase in a number of years at a time when students can least afford it.

"And yet again, there was no sign of this in the Labour manifesto."

The University and College Union (UCU) described the tuition fee increase as "economically and morally wrong".

General secretary Jo Grady said: "Taking more money from debt ridden students and handing it to overpaid, underperforming vice-chancellors is ill-conceived and won't come close to addressing the sector's core issues. "As Keir Starmer himself said last year, the current fees system doesn't work for students and doesn't work for universities.

"The model is broken; it has saddled students with decades of debt, turned universities from sites of learning into corporations obsessed with generating revenue, and continually degraded staff pay and working conditions.

"Labour accepts the issues facing higher education are systemic yet has only applied a sticking plaster. Its principles are vague and could be exploited by vice-chancellors, while higher fees mean even more graduates will fail to pay back their loans, ultimately costing the exchequer.

"The Chancellor says 'invest, invest, invest': it is time to do that in higher education, especially if Labour is serious about delivering a decade of national renewal."

But industry body Universities UK (UUK) said the increase in tuition fees "is the right thing to do".

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UUK chief executive Vivienne Stern said: "Thriving universities are essential to a thriving UK, delivering stronger growth, better public services and improving individual life chances.

"University leaders and government must work together to ensure that our universities are able to fire on all cylinders.

"A decade-long freeze in England has seen inflation erode the real value of student fees and maintenance loans by around a third, which is completely unsustainable for both students and universities.

"Keeping pace with inflation stops the value of fees going down year after year.

"Importantly, this change will not see students paying more to study upfront; repayments are linked to earnings above a £25,000 threshold. The increase in maintenance loans is also very welcome and important."

Before Ms Phillipson's statement this afternoon, the Prime Minister's official spokesman said: "As she will set out, the Government inherited a higher education sector facing severe financial challenges.

"Universities have suffered a significant real terms decline in their income and the gap between disadvantaged students and their peers is the highest on record."

He added: "The Government is determined to take the tough decisions necessary to put universities on a secure footing so that in turn they can deliver more opportunities for students and growth for our economy."

Labour’s manifesto claims "the current higher education funding settlement does not work for the taxpayer, universities, staff, or students".

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Adding: "Labour will act to create a secure future for higher education and the opportunities it creates across the UK."

Earlier this year it was reported fees could rise to as high as £10,500 over the next five years.

At the time, government sources said Sir Keir Starmer’s government would prevent this from impacting the poorest children through the reintroduction of maintenance grants, which were worth up to £3,500 before being abolished by the Conservatives in 2016.

A Department of Education spokesperson told LBC: "We believe that every young person, regardless of their background, should have the opportunity to attend university.

"That’s why we are dedicated to creating a sustainable higher education funding system that supports students, expands opportunities, and upholds the excellence of our world-leading universities.

“The Government is committed to reviewing the higher education funding system to deliver for our economy, for universities, and for students and we will be announcing further details in due course.”