The indexation of undergraduate fees, changes to competition rules and the introduction of an insolvency regime could all feature in the government’s upcoming post-16 skills White Paper, but the Treasury’s fiscal “black hole” means a comprehensive plan for university reform is unlikely to emerge.

As Parliament resumes this week, university leaders are eagerly awaiting Labour’s plan for post-16 education. The paper was originally promised in the summer, but has now been pushed back to autumn, and most predict it will land at a similar time to the chancellor’s budget, normally presented in late October.

Those hoping for new ideas for tackling the university funding crisis may be left disappointed when the paper is published however, with the government thought to be unlikely to set out a reform plan that will satisfy cash-strapped universities.

Over the past few months, “the government has been...bringing a whole bunch of things together in a way that I do think is quite ambitious,” said Vivienne Stern, chief executive of Universities UK (UUK), including recognising that universities “do all sorts of things” and are “not just delivering higher education”. However, she said, “this is probably still...an inadequate reflection of the wider mission of universities”.

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Jess Lister, director of education at Public First, said she wasn’t expecting the paper to offer a comprehensive solution to universities’ funding problems.

“I think they’ll be trying really hard to keep it a post-16 skill paper and not a ‘what do we do about higher education finance’ paper,” she said. “From the higher education side…I’m not actually expecting very much.”

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Part of this is due to “the underlying economic and political forces” that “dictate quite a lot” of what the government is able to do in the higher education space, added Huw Morris, honorary professor at UCL and former higher education director in the Welsh government.

As well as the rise of Reform impacting Labour’s policies, increasing interest rates are having a knock-on effect on the cost to government of student loans at a time of mounting worries about the gap in public finances, potentially eating into what can be spent on post-16 reforms.

“There’s a…charge that has to be paid in year to cover the future unpaid loans…and then that constrains your expenditure on non-statutory elements of activity,” including the coming Lifelong Learning Entitlement (LLE), said Morris.  

And while the Treasury may have to contend with a higher education system that is among “the most expensive” in the world, a plan for reform that reduces student loans is politically difficult, he continued. “So why would you do that? You would just cut the funding and let [institutions] work it out.”

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This means any changes to higher education are likely to be tangential rather than offering an overarching vision for the country’s universities – which may be disappointing but not altogether unsurprising to higher education leaders. 

“We’re not idiots,” said Stern. “We can see that government doesn’t have a huge amount of public funding that it can put into the university system, but you have to do something about the undergraduate tuition fee in England.” 

Supportive measures for universities likely to be included in the paper include a mechanism to link tuition fees to inflation on an annual basis, an insolvency scheme similar to the one in place in the further education sector, and regulatory changes to the powers of the Competition and Market Authority to allow universities to collaborate without breaching competition laws. 

Labour is also likely to focus on its widening participation agenda, which could see more scholarships on offer and changes to maintenance loans.

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There have also been “signs of engagement” on changes to the Teachers’ Pension Scheme, according to Stern. UUK has been calling on the government to allow providers to exit the pension, under which post-92 universities pay employer contributions of 29 per cent, although this is likely to be strongly resisted by trade unions. 

She added that more targeted regulation to reduce compliance expenses could help the sector without costing the Treasury.

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But she warned the government not to “come forward with 65 other unfunded things you want the university sector to do because that will take us in the wrong direction”.

helen.packer@timeshighereducation.com