Joint Information Systems Committee Strategies Conference Focus on Funding Keynote Address by Nigel Brown 7 December 2000

Key Contexts Challenge from the Secretary of State Government Expectations Divergence of National Funding Systems within the UK Inadequacy of the Unit of Teaching Resource

Funding Review Terms of Reference Stage 1 - to identify the future funding requirements of UK HEIs over the next decade - draw on all available sources of data to undertake a comprehensive review of public and private funding sources and how these are deployed - to assess the extent to which these sources meet the future funding requirement

Funding Options Review Terms of Reference (cont.) - cost and model the various funding options including differential fees which might meet the future funding requirements Stage 2 - This will develop criteria against which the strengths and weaknesses of the funding options identified in Stage 1 can be assessed - This assessment will form the basis of policy on the principles for future funding of HE

Publicly Planned Funding for HE to £1 bn. additional funds across the three years funding for an extra 45,000 places mainly part-time and sub-degree most other additional funding for specific initiatives, including C&IT little or no increase in the core funding per student - 0 to 0.5% per annum

C&IT Requirements Re-tooling Teaching and Learning On-line Student Administration Improving Academic and Pastoral Support Scholarship and Research - Empowering the Individual E-University or E-Universities

London Economics Option Types 1. Increased Means-tested Fees (differentiated or undifferentiated) 2. Higher Means-tested Fees for Those from the Wealthiest Backgrounds 3. Increased Fees with Income-contingent Loans 4. Income-contingent graduate contributions

Increased Means-tested Fees Increased public contribution Increased private contribution from all students who currently pay a contribution -about 50% from Differential maximum contribution by subject or possibly by institution

The Wealthy Pay More No Necessary Increase in Public Funding Those who Currently Pay No Contribution or Pay a Contribution Less Than the Maximum make no increased Contribution Those who Currently Pay the Maximum Contribution Pay an Increased Contribution on a Means-tested Basis up to the average full cost across all subjects

Increased Fees Backed By Income-Contingent Loans Increased Public Funding Up-Front to Meet the Increased Fee Payment Decreased Private Contribution Up-Front Contributions from Graduates on an Income-Contingent Basis Until the Total Real Cost is Repaid: Those Who Never Earn Above the Threshold Never Required to Repay

Graduate Contributions No Necessary Increase in Public Funding Unless Graduate Contributions Combined with an Increased Up-Front Fee Income-Contingent Graduate Contributions Either Open-Ended(Graduate Tax) or to Some Pre-Set Maximum Can Be Paid to the Exchequer, to a Separate Higher Education Fund,or to the Graduates Institution

The Status Quo Means -tested Contribution to Tuition Costs (The Student Fee) up to a Maximum in the Current Year of £1,050 for Full-Time Undergraduates 44% currently pay no fee: This will rise to 50% from The Vast Majority of Maintenance Support is Through Income-Contingent Loans

Universities UK Options Under Consideration A. Status Quo with Limited Modification B. Increased Fees Backed by Income- Contingent Loans C. Deferred Payment/Graduate Contributions D. Full Cost Fees and Means-Tested Scholarships E. Institutional Opt-Out/Endowment

Higher education funding per student in England, 1993 to 2001 (1999 prices)

Tertiary educational expenditure from public and private sources as a percentage of GDP (1997)