The link between universities’ performance in the teaching excellence framework and the tuition fees that they can charge has been retained in the higher education White Paper, but the system is set to be phased in more slowly in response to sector concerns.

The document, published on 16 May, amends plans for the TEF by proposing that formal assessments of providers’ performance on measures such as student satisfaction and graduate employment, leading to a series of differentiated fee caps, would not be undertaken until the third year of the scheme.

The second year of the TEF is now proposed as a pilot exercise, with all institutions that volunteer to participate and meet basic standards being permitted to increase their fees in line with inflation.

This approach would probably result in widespread inflationary increases in tuition fees in 2017-18 (based on the results of Quality Assurance Agency reviews) and 2018-19, with any widespread variation in fees unlikely to emerge until September 2019.

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Learn more about the higher education White Paper

Sector leaders had warned that linking fees to TEF performance could undermine efforts to widen access and punish institutions which needed support the most; and that having up to four differential and sub-inflationary fee caps could amount to a “bureaucratic nightmare”.

Jo Johnson, the universities minister, told ����Vlog that he had “listened carefully” to sector concerns but that financial incentives were necessary to encourage institutions to improve teaching standards.

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“We have long accepted the principle that we fund research according to quality and we feel it’s appropriate to apply the same principle to teaching,” Mr Johnson said. “This will encourage institutions to rise to the standards of the best in the sector and it will allow institutions offering high quality provision to expand.

“We want to see more high quality provision in the sector and this will be one means of encouraging institutions to focus on the quality of teaching.”

The White Paper says that assessments at subject level should be piloted in the third year of the TEF, ahead of formal assessment on this basis from year four onwards.

A technical consultation on the TEF methodology was also launched on 16 May, and Mr Johnson confirmed that the three core metrics proposed – National Student Survey results, graduate employment data and retention rates – remained unchanged.

The ����Vlog Funding Council for England will be asked to develop further metrics and qualitative submissions from institutions, to be judged by independent panels, would also help to determine TEF scores.

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Mr Johnson acknowledged that some sector leaders felt that implementation of the TEF “was being moved forward too rapidly” and argued that the phased introduction, and the delaying of financial consequences, should address these concerns.

“In years one and two we want the emphasis to be on getting the system right before we hang financial consequences from it,” Mr Johnson said.

“While we are in this period of development of the TEF in the early years, we think it is appropriate to focus on reputational incentives that will gradually build up over time as the system develops.”

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Dame Julia Goodfellow, the president of Universities UK and the vice-chancellor of the University of Kent, said that she was “pleased that government has listened to the views of universities”.

“Universities will work with the government to see how this can best add value to all students, whatever their choice of subject or university,” Dame Julia said.

But Emran Mian, director of the Social Market Foundation, said that the government “might have gone further” in increasing the variability of fees.

“Almost every university charges the same amount despite large differences in the quality and intensity of teaching,” he said. “The proposals in the White Paper will largely leave that status quo in place.”

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chris.havergal@tesglobal.com