The Russell Group’s call to introduce a tiered tuition fee system is “a disaster” that risks leaving the rest of the UK sector behind, a scholar has warned.

Earlier this month, Libby Hackett, chief executive of the Russell Group, urged the government to introduce a system of differentiated fees and allow research-led universities to charge more, which has stirred controversy.

Last week, Vanessa Wilson, chief executive of the University Alliance, said a tiered tuition fee system represented “an existential threat” to the sector, adding that the proposal risks hardwiring “old hierarchies of research-intensive and teaching-focused institutions into the funding system” at a time when "the Government is rightly seeking to create parity of esteem between technical and academic education”. 

Hackett’s comments were made following government analysis that found it costs £3,000 more on average to educate a UK undergraduate than universities receive.

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In the UK, the maximum tuition fee is £9,790 per year.

Glen O’Hara, professor of modern and contemporary history at Oxford Brookes University and a prominent commentator on the financial crisis afflicting the UK sector, said Hackett’s proposals “would be a disaster” for tertiary institutions in England and Wales, if enacted.

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He argued any such move risks further “endangering the financial health” of the sector at a time “when some Russell Group institutions have already radically destabilised what remains of our university ‘system’” by recruiting so many extra students.

“Given that degrees are basically a merit good – so that demand is increased for [them] as the price goes up, rather than as usual the other way around – this will increase the Russell Group’s ability to take every student they possibly can, further denuding the vast bulk of the sector,” he said. 

O’Hara expressed concern that such a policy would also increase the likelihood of bankruptcies and mergers at non-Russell Group universities, “even though their teaching can often be better than in the Russell Group. So the taxpayer, who for decades financed the capital side, and who will likely be asked to bail out failing higher education institutions – see Dundee – will once again get fleeced.”

In 2025, the Scottish government pledged £40 million to the University of Dundee to save the institution from insolvency. The first tranche of £13 million was paid in March of this year and an investigation is under way to verify whether the institution is eligible for the further £27 million.

Nick Hillman, chief executive of the ����Vlog Policy Institute (Hepi), also disagreed with Hackett’s position that certain universities should be able charge more. One of the primary reasons is because differential fees means different things to different people.

“Some people want higher fees for richer people, some want higher fees for courses with worse employment outcomes,” he explained.

But Hillman described Hackett as a “very effective operator”.

“She [Hackett] is looking for ways to help her members get more money…She’s doing the job that she’s been appointed to do even though it does make life a little bit less comfortable for the rest of the sector.”

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According to Hillman, Hackett’s approach is “distinctly different” from that of her predecessor Tim Bradshaw, who “stressed collegiality”. Part of her “different” approach, he continued, is that it is “slightly more obvious”.

“There was a bit of a sense before that the Russell Group were making their case very loudly in the corridors of power…and then now Libby [Hackett] is just putting her head above the parapet and saying in public more clearly the sorts of things they might have been hinting at in private anyway.”

Hillman also said that Russell Group vice-chancellors are letting Hackett “do the tough fighting for them” while continuing to focus on “areas of agreement” with fellow v-cs.

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Hackett has also ruffled feathers by calling for minimum entry standards for access to student loans – a stance condemned last week by Johnny Rich, chief executive of the new ResearchPlus mission group, which represents smaller research-intensives.

But that idea is now being considered by the government. And Hackett’s comments about a tiered university tuition fee system were made one month after the delay of the implementation of the international student levy until 2028 was announced, for which the Russell Group lobbied. 

In that sense, the Russell Group has “got the wind in their sails”, Hillman remarked.

But neither Hillman nor O’Hara believed that government would pay heed to Hackett’s call on fees.   

“I can’t imagine the government going anywhere near it at the moment,” said Hillman.

“Remember, Andy Burnham obviously knows Greater Manchester better than anywhere. Are we really going to have a world where the University of Manchester, which sits cheek by jowl next to Manchester Metropolitan University, is allowed to charge a different fee?”

Having worked in the tertiary sector in Australia for a decade prior to returning to the UK, there are suggestions that Hackett may be influenced by the differential tuition fee system operational in Australia since 1996.

The system, which formerly priced tuition fees partly according to expected future earnings, was overhauled in 2021 when the Job-ready Graduates Package shifted universities to a price-signalling model that steered student choices towards government-favoured fields like STEM.

Andrew Norton, professor of higher education policy in the Monash Business School at Monash University, told ����Vlog: “If the policy goal is to steer choices, then I think differential rates can have small effects, but these are not large enough to justify the cost to taxpayers or students.”

He said that Australia experienced a dip in arts enrolments in 2021 when differential fees more than doubled under the Job-ready Graduates Package, “but this intensified a downward trend rather than being something completely new”, he said.

The University Alliance's Wilson agreed, describing the international evidence for tiered fees as "not reassuring. Countries that use this model still grapple with unsustainable and unstable finances. Additionally, they often experience lower HE participation and degree completion rates than the UK."

She added that the Russell Group proposal "leaves important questions unanswered: What would the consequences be for the devolved nations and their different fee systems? Who would decide which institutions have an elite enough “reputation” to attract greater funding and using which criteria? Who would foot the bill for this increase in fees; students, taxpayers, or both? These questions are not technical niceties to be worked out later but instrumental to the new system they propose.

“Creating a more stratified system is not the same as creating a better one."

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rosalind.skillen@timeshighereducation.com