The debate on the future financing of English higher education is heating up. In early July, Business Secretary Vince Cable, a key figure among the Liberal Democrats, suggested replacing the current tuition fee scheme with a ‘graduate tax’, although the government is striving to distance itself from this idea. At present, English higher education is partially financed by an annual tuition fee of GBP 3 225, which, before the elections, the Liberal Democrats had promised to abolish.  As an alternative means of financing, some favoured a progressive graduate tax as a more just system, but the majority of responses to such a proposal were negative. Criticism primarily stemmed from the fact that the tax would go to the national treasury instead of to the university that educated the student. Other concerns included the fact that some high-earning graduates would pay more in tax than their education cost; that tax income would only arrive with years of delay whereas universities needed money immediately; and that the system might lead to brain drain out of Britain.

It is unlikely that the funding debate will be settled any earlier than the delivery of Lord Browne’s independent review of higher education funding, which is due to be released in October. Lord Browne’s brief is expected to include discussion of whether the present fee amount should be increased and if fees should be replaced by alternative forms of student ‘contributions’. Higher student and parent contributions appear almost to be a necessity in light of the already-announced state funding cut for higher education of 25 percent, which, according to rumours, could still rise considerably.

In other news, the replacement of the research assessment exercise (REA) by a research excellence framework (REF) has been postponed by a year, pushing completion of the change to 2014. The REA distributes GBP 1.5 billion in annual quality-related funding among English institutions.  A quarter of the score of the new REA was to be based on social and economic “impact”. However, David Willets, the universities and science minister, has decided that there is not yet consensus on what such impact could be, nor how to measure it, thus delaying the reform. 

Department for Business, Innovation and Skills – Speech