Tuition fees could 'rise with inflation' and maintanence grants get restored as current system 'worst of all worlds'

It comes after increasing warnings from universities of black holes in their budgets, as fees and grants have not kept up with rising costs.

Tuition fees for home students in England have been capped at £9,250 since 2017 and Universities UK said any increase should be accompanied by additional support to help with the cost of studying through maintenance loans and grants.

The Times has now reported that Education Secretary Bridget Phillipson is considering increasing fees in line with inflation, saying the current system is the “worst of all worlds”. She said earlier in the week that changes would be made before the end of the Parliament.

The paper says that there are “live” discussions over increasing fees by 13.5 per cent over the next five years to £10,500. At the same time, Labour would restore maintenance grants to the poorest students, which were axed by the Tories in 2016.

The government’s two big fiscal events are the Budget on 30 October and the Spending Review next April, which sets departmental budgets going forward.

Universities have increasingly been clamouring for a change in the tuition fee system, as rampant inflation in recent years, along with a reduction in international students, has put higher education finances under increased pressure.

Professor Shirley Congdon, vice chancellor at the University of Bradford, highlighted how Rishi Sunak’s visa changes have cut the number of overseas students, which institutions were effectively using to cover the cost of home fees.

She explained: "Tuition fees for home undergraduate courses have not risen substantively since 2012 and no longer cover the cost of delivery. It is no secret that in recent years many universities have sought to supplement the cost of these courses by increasing their intake of overseas students.

"But changes to the graduate visa route introduced by the previous Government led to predictable falls in income for many universities. There is an understanding shared by the Government that the funding model for UK undergraduates requires reform, with the Education Secretary stating there are 'no easy answers or quick fixes'.”

Prof Congdon said that only 16 per cent of home fees are being covered by the government, adding: “The current funding model is not working for students, universities or taxpayers. She explained that universities are "integral to the economic resilience of cities and towns” across Yorkshire.

Universities UK Professor Dame Sally Mapstone recently told the BBC: “The major problem with university finance is that for the past eight to nine years, direct government grants and fees haven’t kept up with the cost of teaching and with inflation, so more and more institutions are facing a budget deficit overall.

“We think that there needs to be a good dialogue with government in partnership about the relationship between the direct teaching grant that government can provide and the fees that students pay.

“We are alert to the fact, of course, that when you say fees should go up, people are alarmed at the consequences for students, which is why we also think that it’s very important that the support that students get in terms of maintenance loans and grants also be looked at.”

While the Education Secretary, Ms Phillipson told LBC earlier this week that there will be “improvements on the system by the end of the Parliament”.

She said: “It’s not something that I want to go to, but I do recognise that over time the value of the fee has eroded. It hasn’t gone up in a very long time. The system we have got overall is the worst of all worlds.

“We will deliver improvements on the system by the end of the parliament. I would hope to do so as soon as I can because I recognise the challenge is big. What I would say is that it’s highly complex. It is really complicated in terms of how we deliver a fairer system.