Cable lays down gauntlet over university fees

06 Apr 2011

The Business Secretary, Vince Cable, has warned universities that plan to charge the maximum fee of £9,000 a year that they could be penalised for being uncompetitive.

In a speech to the annual conference of the Higher Education Funding Council for England, Mr Cable said 'the biggest mistake' a university could make would be to 'underestimate its consumers'. He warned university leaders that students will search for value for money.

He said that meant that in a new competitive, market based system some universities 'could find themselves in trouble if students can't see value' in what they offer.

Threat to reduce student numbers

He warned that if some universities do find themselves with unfilled places then the government might 'withdraw those places' and - he added - institutions 'should not assume they will easily get them back'.

The speech was clearly intended to raise the pressure on universities to charge fees well below the maximum allowed.

He added that the government would stimulate competition by encouraging FE colleges and private providers which offer courses at prices that students want. This mean that existing universities 'could be seriously squeezed'.

He said the government is considering increasing the student number limits for universities that charge lower fees in order to stimulate competition and 'reward the most competitive providers'..

With several universities still to set their fee levels, it seems the Business Secretary is playing a game of chicken with vice-chancellors....waiting to see who blinks first.

The full speech is here: nds.coi.gov.uk/content/Detail.aspx