English universities could face “severe” financial consequences if the government follows the advice of an inquiry and cuts student fees to £7,500 a year, a cross-party House of Lords committee has warned.
The Lords science and technology committee said on Wednesday that the review, by businessman Philip Augar, had “completely missed the mark” in terms of safeguarding universities’ research funding.
Universities can currently charge up to £9,250 in tuition fees, which students generally finance through loans that are repayable after graduation. The Augar review, commissioned by former prime minister Theresa May, said this maximum should be lowered, reducing university revenue by nearly £2bn a year. The government should make up the shortfall through direct teaching grants, it added.
Tuition fees have been a source of political contention between the Tory and Labour parties. However, the Lords committee said universities were concerned that teaching grants would not be increased and that this would affect research, which is currently cross-subsidised from tuition fees.
The committee said the Augar review had failed to take “a holistic approach to the funding of universities and made no attempt to assess the potential impact of its recommended reductions in student fees on the funding of research”.
It said some of Mr Augar’s other proposals, such as a greater role for the Office for Students, the higher education sector regulator, in allocating funding, “would erode the autonomy of universities”.
“We are concerned that the Office for Students would decide the relative value of different subjects,” it said. “We do not believe that the Office for Students is the right body to make these decisions.”
The Department of Education said it would respond to Mr Augar’s review “in due course”. It said it was committed to increasing research and development by £7bn by 2022.
The House of Lords report said the government would not meet its target of investing 2.4 per cent of gross domestic product in R&D by 2027 “unless funding for research in universities is secured and the UK can attract researchers from overseas”.
The Lords report also said the government should mitigate the potential negative effects of Brexit by committing to Horizon Europe, the EU’s scheme for funding research between 2021 and 2027, “as soon as possible”. It said post-Brexit immigration laws should not hinder the ability of UK universities to recruit and retain researchers.