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Impact of Tuition Fee Rises for Leeds

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Impact of Tuition Fee Rises for Leeds Appendix 1 Impact of tuition fee rises for Leeds 1. Introduction 1.1 A deputation led by the Leeds University Union to Council on 17 th November 2010 asked council members to call upon local MPs to: • support adequate funding of higher education without removing the cap on fees; • vote against the cuts to higher education and against any subsequent rise in fees; and • vote against tuition fee loans with interest, because Muslim students will not be able to use the proposed loans. 1.2 The Council referred the deputation to Executive Board for consideration at its meeting on 5 th January 2011. Executive Board decided that officers should be authorised to engage with the universities and other relevant parties in order to undertake a piece of work to help fully understand the impact of the changes on students, the universities and the economy in Leeds, with a further report detailing the findings being submitted to the Board in due course. 1.3 Therefore, this report outlines the potential impacts of tuition fees rises and the wider changes to higher education being implemented in 2012-13 for Leeds. It was decided that the report should be written after the publication of the government’s White Paper ‘Higher Education: Students at the Heart of the System’, in order to more accurately assess potential impacts for the City. 1.4 Although the publication of the White Paper has offered some clarity, there is still uncertainty on how students, institutions and indeed cities will be effected by the proposed changes. This is due to the complexity and the changing nature of the proposals, with consultations on the various elements of the White Paper running from June 2011 to spring 2012. Indeed the current proposals are far reaching and introduce unprecedented changes to the higher education system. As result the findings of this report can only be seen as reflecting the situation as of January 2012. In addition the report focuses on the changes which will be implemented in the first year of 2012-13, as the proposals post 2013 are still unclear. 1.5 The attached report has been written in collaboration with staff and students union representatives from Leeds College of Art, Leeds Metropolitan University, Leeds Trinity University College, and the University of Leeds, along with colleagues from Environments & Neighbourhoods, Children’s Services and Resources. In addition Leeds City College have also been consulted on the draft report. 1 Appendix 1 2. Background 2.1 The coalition government announced changes to tuition fees in November 2010, allowing universities to charge undergraduate tuition fees of up to £9,000 per year from 2012, raising the cap from the current level of £3,375 . 2.2 On 28 th June 2011 the government set out its intentions for the reforms to the university sector in the ‘Higher Education: Students at the Heart of the System’ White Paper. The reforms are concentrated around the three main issues listed below, and seek to introduce increased competition, choice and diversity into the sector. 1. Financing of higher education 2. The student experience 3. Social mobility A summary of the reforms can be found in the annex. 2.3 On 2 nd December the Office for Fair Access announced that it had approved the level of fees to be charged at 149 institutions (124 higher and 25 further education institutions). 2.4 Approximately 54% of universities and colleges have had their plans to charge the maximum £9,000 fees for some or all courses approved. However, OFFA believe that only 4% of institutions will charge the average fee of £9,000, once fee waivers have been taken into account. 2.5 It is estimated that the average fee charge for institutions in England will be £8,354, this reduces to £8,071 when fee waivers are included. 3. Impacts 3.1 The Chief Economic Development Officer chaired a meeting of council officers, and staff and student representatives from Higher Education Institutions (HEIs) in Leeds, to consider the impacts of tuition fee rises to the individual institutions and the wider Leeds economy. It was concluded that the impacts could be presented under the following themes; funding, student numbers, accommodation and infrastructure, widening participation, and curriculum changes. 3.2 This report considers the impact of tuition fees specifically for the four HEIs in Leeds: University of Leeds, Leeds Metropolitan University, Leeds Trinity University College, and Leeds College of Art. However, it should be recognised that higher education provision is also available in further education colleges within the City. Principally through Leeds City College (including Leeds College of Music) and Leeds College of Building, who between them have around 1,600 students studying on higher education courses. 2 Appendix 1 3.3 Funding 3.3.1 The most direct impact of the rise in tuition fees will be on how HEIs are funded. Over the period of the Spending Review, the proportion of funding for teaching provided by direct grant from Higher Education Funding Council for England (HEFCE) will decline and the proportion from graduate contributions, supported by subsidised loans from Government, will increase. 3.3.2 In terms of the current position in 2009/10 the total income of HEIs in England was £22.2 billion. HEFCE provided £7.4 billion of this income, whilst tuition fees and education contracts contributed £7.1 billion. The chart below shows the current distribution of income sources. Sources of income for Higher Education Institutions in England 2009/10 Source: Higher Education Statistics Agency (2011) 3.3.3 Of the £7.4 billion HEFCE funding, £4.7 billion is allocated for teaching grants, £1.6 billion for research and £1.1 billion is classified as ‘other’ funding. The Government has yet to finalise HEFCE teaching grants for the current spending review period. However, it is expected that, as income from tuition loans replaces HEFCE teaching funding, teaching grants will be reduced in cash terms to around £2 billion by the 2014-15 financial year. Over the same period, the Department for Business, Innovation and Skills (BIS) loans outlay will rise and it is estimated that total BIS investment in higher education in England could increase by nearly 10% in cash terms by 2014-15 if participation remains at existing levels. 3.3.4 In 2009/10 universities and colleges in Leeds had a total income of £717million, 35% of which is granted through the HEFCE, and 30% from 3 Appendix 1 tuition fees. The current sources of income for HEIs in Leeds are outlined in the table below. Despite the future reduction in funding council grants, institutions in Leeds believe that the funding received from tuition fees, along with funding generated through diversification of income sources will ensure that overall income levels will remain relatively stable, and although there may be a fall in income this year this will remain manageable. Funding to Higher Education Institutions in Leeds 2009/10 (£/m) Institution Total Funding Tuition fees & Research Other* income Council Grants educational Grants & contracts Contracts £/m % £/m % £/m % £/m % Leeds College 13.261 8.850 66 4.174 32 - - 237 2 of Art Leeds 164.830 74.303 45 59.048 36 2.368 1 29.111 18 Metropolitan University Leeds Trinity 21.339 10.597 50 7.620 36 32 0.1 3.090 14 University College The University 517.781 157.773 30 143.488 28 119.319 23 97.201 19 of Leeds Total 717.211 251.523 35 214.330 30 121.719 17 129.639 18 *Includes accommodation, property, consultancy, endowments and investments income, etc 3.3.5 In order to replace the grant funding being lost, HEIs in Leeds have currently set undergraduate tuition fees ranging from £8,000 at Leeds Trinity University College, to the maximum £9,000 at the University of Leeds. These fees have been approved by OFFA and will be in place from September 2012. Fee waivers and financial support will be available to students and are discussed in section 3.6.8. Tuition fees by institution from September 2012 Leeds College Leeds Leeds Trinity University of of Art Metropolitan University Leeds University College Proposed £8,250 £8,500 £8,000 £9,000 fees post 2012 3.4 Student numbers and projected impacts 3.4.1 In order to increase income levels in the coming years HEIs in Leeds will have to continue to attract students. In the four HEI’s referred to in this report there are currently approximately 57,300 undergraduate students. 51,800 are from UK & EU countries, and around 5,500 are international students. In addition there are approximately 1,600 undergraduates studying at further education colleges in the city. In 2010, approximately 101,000 applications for undergraduate degree courses in Leeds were made (prospective students have up to five selections), with around 15,400 being accepted (UCAS, 2011). 4 Appendix 1 Number of undergraduate students 2010/11 Institution Full time Part time International Total Leeds College of 1,105 32 15 1,152 Art Leeds 18,675 6,823 3,305 28,803 Metropolitan University Leeds Trinity 2,328 30 48 2,406 University College University of 21,528 1,279 2,151 24,958 Leeds Total 43,636 8,164 5,519 57,319 Note: Full & part time figures include UK & EU students only 3.4.2 Currently the HEFCE implements student number controls for HEIs in England, to ensure that universities and colleges do not over recruit students to their courses, and in order to control the student loan book. By fixing the number of student places HEIs have a degree of certainty from year to year about their likely income from the teaching grant and tuition fees.
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