Nightmare scenario for universities

Reading University campus Record numbers are expected to miss out on a university place next year

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Storm clouds are gathering over university campuses.

This week the lecturers' union issued warnings of possible national industrial action over the threat of redundancies and in defence of their pensions.

And the mismatch between the number of university applications and the availability of places is coming to a head.

The university admissions service, Ucas, will shortly publish the latest figures on this year's applications, after maintaining a silence on this sensitive topic during the general election.

The statistics will confirm that a rise of around 100,000 applicants, compared to a growth in places of just 10,000, leaving more university hopefuls than ever without a place.

Meanwhile university leaders are staring into a potential abyss with the prospect of government funding for higher education falling in real terms in each of the next four or five years.

But trumping this general gloom is what we might call a nightmare scenario that sends shivers down the spine of university leaders.

Unpopular

While directly it only affects universities in England, the rest of the UK would be hit too through the Barnett formula that determines funding allocations to the devolved administrations.

The nightmare scenario, which is being seriously discussed by leading vice-chancellors, goes like this.

First, as expected, Lord Browne's independent review proposes that the cap on student tuition fees should be raised.

Then the government - grateful that it can pin an unpopular policy onto an independent review established by the last government - accepts that fees should rise.

But in the current tough spending climate, the Treasury decides that government funding for universities can be cut further, as they will soon be getting additional income from the higher fees.

The next twist, though, is that at the final stage Parliament defies the government and refuses to endorse the lifting of the fee cap.

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Backbench Labour MPs might seek to commit leadership candidates to opposing higher fees”

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This would leave universities losing out on both government funding and the money intended to replace it.

Steve Smith, President of Universities UK, is haunted by this potential "a double whammy" for higher education.

While this scenario might seem extreme, the election result makes it feasible.

Remember that Liberal Democrat MPs were elected on a manifesto that promised to abolish university tuition fees in England.

Most of them, including Nick Clegg and Vince Cable, also signed the National Union of Students' election pledge to vote against higher fees.

While the formal Coalition Agreement anticipated this problem by giving Lib Dem MPs permission to abstain in a Parliamentary vote on the issue, many of them will feel that is not enough and will want to actively oppose any fee increase.

Fees demo Raising fees was unpopular the first time around

They could be joined by many Labour MPs who, with the freedom of opposition, will combine unease over higher fees with delight in causing trouble for the government.

This scenario is all the more likely to happen if the Browne Review reports before the Labour leadership contest is concluded and ahead of the Liberal Democrats' annual conference in the autumn.

That is why there are strong rumours that the Browne Review, which had been confidently expected by August, will now be delayed until October.

The delay would certainly take some of the heat off Lib Dem MPs, who would face intense grass-roots pressure to oppose any recommendation to raise fees when they gather at their party conference.

'Massive battleground'

Delay would also reduce the chances of tuition fees becoming a Labour leadership issue.

Backbench Labour MPs might seek to commit leadership candidates to opposing higher fees.

So, in much the same way that the fees issue was conveniently parked in a siding by Labour and the Conservatives during the general election campaign, this prickly issue could remain out of sight a little longer.

Delaying a decision on Browne's recommendations might also make it easier for the government to "cherry-pick", rather than accept, the proposals in full.

After all, when Labour brought in university fees in 1997, they certainly "cherry-picked" the bits they liked from Browne's predecessor, the Dearing Review.

The then Education Secretary, David Blunkett, wrote at the time that the fees issue was "going to be a massive battleground" and that he would have to face the "unpopularity of it".

But unlike today's coalition government, his Labour government had a huge parliamentary majority to help get its unpopular fees proposals through.

This time, ministers might accept a Browne recommendation to lift the fees cap.

Bumpy few years

But they might ignore any conditions he adds that the extra income from fees should be additional to, not a replacement for, government funding.

And, even if these worst fears prove unfounded, there is a more practical problem that will prevent higher tuition fees filling the immediate hole left by government spending cuts.

This is because the earliest date universities could start to charge higher fees is autumn 2012. Even that would require the proposals to be considered by Parliament before Christmas.

And since the higher fees would only apply to new, first-year students it would not be until 2015 before universities receive the higher fee income from the full cohort of undergraduates.

As Steve Smith warned a conference of university leaders this week: "It's going to be a very, very bumpy few years."

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