Theresa May has admitted that the education system is failing to serve the “needs of every child” but immediately faced criticism as it emerged that plans to overhaul post-18 funding would be unlikely to result in more money from the Treasury.

Critics highlighted the government’s terms of reference for the review, which will be led by the former City financier Philip Augur and could result in lower fees for some courses and the return of maintenance grants.

It said the study would not be able to make recommendations linked to taxation and “must be consistent with the government’s fiscal policies to reduce the deficit and have debt falling as a percentage of GDP”.



Quick guide Tuition fees review Show Hide Why now? It has been on the cards since the Conservatives promised a major review of funding across tertiary education in their election manifesto. With graduate debt running at £50,000 upwards, there has been growing concern about the cost of going to university and whether it represents value for money. Fees in the UK are among the highest in the world, and some doubt there will be a return on such a huge investment in terms of graduate earnings.

What will the review look at? The government is promising a wide-ranging review of the whole of post-18 education and funding, including the divide between vocational and academic qualifications and the decline in lifelong and part-time study. Most of the interest will be in undergraduate tuition fees, which stand at a hefty £9,250 a year at all but a handful of universities.

What are the options? The government will not seek to match Labour’s promise to axe tuition fees altogether, which the Conservatives regard as unaffordable and regressive. The review could recommend cutting or freezing fees. One of the most controversial options is the introduction of variable fees for different courses, depending on the cost of putting a course on, potential graduate earnings and the economic value to the country. So some universities might for example cut their fees for social science and humanities courses, which generally attract lower graduate earnings than engineering or maths.

Will that make the system fairer? Many fear it will result in the most disadvantaged students applying for cheaper courses with the poorest graduate outcomes, hindering rather than boosting social mobility. Senior Tories would prefer to see alternative measures including a cut in interest rates on student repayments, which currently stand at 6.1%, and increased financial support for disadvantaged students. There is widespread support for the return of maintenance grants for poorer students, which were scrapped in favour of loans by the Tories, making it even more expensive for those students to go to university.

How quickly are things likely to change? Not very. With the review set to run for a year, reporting in early 2019, the government has been accused of kicking the issue into the long grass. If you are applying to start university this September, nothing will have substantially changed.



The shadow education secretary, Angela Rayner, said the wording suggested that students, colleges and universities would end up footing the bill.

“Funding for further education has been slashed and cuts in higher education have seen UK universities fall down global league tables, yet buried in the small print of the terms of reference it is made clear there will be no new money to support any recommendations, leaving it down to already cash-strapped colleges and universities to cover any extra costs,” she said.

The NUS president, Shakira Martin, said she was glad to hear the prime minister accept that the “current system is not fit for purpose” but added that she wanted ministers to commit to investing in the skills of the future.

“The prime minister is choosing to move the deckchairs around a ship she already acknowledges is sinking,” she said.

May used a speech at Derby college to launch the review. She insisted that tackling the divide between academic and technical education had been a driving force since she entered parliament in 1997, raising the issue with her maiden speech.

She criticised the fact that almost a quarter of students at Britain’s “research-intensive universities” come from the 7% of the population who attend private schools.



“And the professions which draw their recruits primarily from these institutions remain unrepresentative of the country as a whole, skewed in favour of a particular social class,” she said, arguing that the odds were stacked against a working-class boy from Derby who wanted to become a lawyer.

But May also said a privately educated middle-class girl who wanted to become a software developer by going straight into the industry faced the expectation of taking A-levels and entering a Russell Group university.

“Most politicians, most journalists, most political commentators took the academic route themselves, and will expect their children to do the same.”

She said poorer students were “bearing the highest levels of debt” in the current system, which she said was not good enough.

“We must have an education system at all levels which serves the needs of every child. And if we consider the experience which many young people have of our system as it is, it is clear that we do not have such a system today,” she said.

But she also insisted that the cost of universities must be shared between graduates and the taxpayer, claiming that Labour’s policy to scrap fees would mean tax rises for the majority who did not go to university. It would also mean universities would be competing with hospitals and schools for funding, and would entail reintroducing a cap on student numbers, she claimed.

Bill Rammell, the vice-chancellor of the University of Bedfordshire and a former higher education minister when variable fees were introduced in 2005, argued that raising fees to £9,000 and beyond went “too far in shifting the balance of responsibility for funding higher education between the state and the individual”.

He said the review was welcome but that it must ensure that universities will be compensated for any reduction in fee income. “Otherwise it will result in widespread job losses and a reduction in standards as universities scramble to balance their already stretched finances.”

The review could result in universities having to charge less for some courses based on their costs and potential graduate earnings, with hints that institutions could be expected to take a lower amount for humanities and social science courses.

However, the former education secretary Justine Greening warned that this could hit social mobility as higher fees could put poorer students off more lucrative courses.

May also spoke out against the number of university vice-chancellors who take part in the decision-making process on their own salaries, amid widespread concern about excessive pay levels.

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The prime minister was asked about the issue after figures revealed that 95% of university leaders were either members of their remuneration committee or entitled to attend meetings.

The information, obtained under freedom of information laws by the University and College Union, showed just seven of 158 institutions surveyed said their vice-chancellors were in effect barred from attending.

Asked if she feared that this was fuelling soaring pay levels, May said: “One of the points I would make – that I know the universities minister, Sam Gyimah, also made – is we should be concerned when we see vice-chancellors sitting on remuneration committees which determine their pay.”

The comments came after universities were told they would have to justify any decisions to pay vice-chancellors more than 8.5 times the average salary.



