The Education Committee has today (8 Dec) published the written evidence for its inquiry into value for money in higher education.

This is the written evidence from Confederation of British Industry (CBI) recommending to:

Keep higher education funding independent and sustainable through an income-contingent fee and loan system

UK universities are amongst the best in the world and higher education is one of our stronger export sectors. Research by Universities UK has demonstrated that, in 2014-15, our universities earned a total of £13.1 billion in export receipts. But the softer links with the UK that universities drive means that even greater long-term value is driven by the sector than this. To protect our global position and the positive impact universities have across the UK’s regions and nations, they need to be sustainably funded with a system that allows higher education to be accessible to students from all backgrounds, as well as being affordable to the taxpayer.

A fair and sustainable system for university funding must balance the costs between graduates – as the primary beneficiaries of a university course – and taxpayers, and enable universities to contribute to prosperity.

There are clear and well-evidenced benefits to graduates associated with receiving a university education. According to research by the former Department for Business, Innovation and Skills in October 2013, these include (but are not limited to) higher earnings of around £168,000 for men and £252,000 for women across a graduate’s working life, an increase in the likelihood of being employed by 3.3% points, better mental health and better life satisfaction. Alongside benefits to individuals, there are also substantial wider benefits to the UK as well.

As a provider of skills, generating and translating world-class research into new products and services, universities help to spread growth across the UK, with research by Universities UK (UUK) in October 2017 demonstrating that, between 2014-2015, the higher education sector increased the value of graduates’ human capital (i.e. the knowledge and skills they contribute to the labour market) by 28 per cent, undertook £7.9 billion worth of research and supported almost one million jobs in the UK.

The current income-contingent, time-limited loan system is broadly effective in delivering this outcome and should be preserved.

The system has facilitated a considerable expansion in university places with the Resolution Foundation highlighting that in 1996 (prior to the introduction of tuition fees) around 12 per cent of those aged between 16-64 had a degree equivalent qualification or higher, whereas today 30 per cent do. This has coincided with a marked increase in participation from those at the lower end of the income distribution as well with disadvantaged students now 73 per cent more likely to enter university than in 2006. There has also been an increase in the amount of resource available per student, with funding per student at the highest level for 30 years. There is little evidence to suggest the fee and loan system discourages social mobility.

The system effectively balances the cost between graduates and taxpayers.

Importantly, the expansion of higher education has been delivered in a way that is sustainable for taxpayers with the long-run taxpayer contribution for higher education reducing and thereby helping to facilitate greater investment in the wider education and skills system. As the CBI’s pre-Budget letter to the Chancellor stressed, additional resources are needed to protect per pupil funding for the remainder of this Parliament and to replenish schools’ capital budgets. Although hard to forecast precisely, the IFS has estimated that the long-run taxpayer contribution has been reduced by around £1.1 billion when compared to the pre-2011 system. As repayment rates become clearer, further adjustments to the system may be necessary to preserve a fiscal balance, but the basic outline of the system is the right one – and any further changes should seek to preserve the attraction of a university education for those from lower income backgrounds.

The focus of concern on access for lower income students should not be fees, but maintenance. The abolition of maintenance grants has meant that the poorest students now graduate with the most amount of debt.

Maintenance is a key concern for poorer students, as it is a cost they meet while studying – rather than once they are in employment. Since maintenance grants were converted into loans in 2015, the debt accumulated by the most disadvantaged students has increased substantially. Students from the poorest 40 per cent of families now graduate with debts (on average) of around £57,000 around £14,000 more than students from the richest 30 per cent of families. As the IFS has warned, the greater debt incurred by disadvantaged students may reduce participation from prospective students in the long-term, reversing some of the progress on participation outlined above.

The government should monitor university participation for the most disadvantaged and reintroduce means-tested maintenance grants if there be a reversal in current trends.

The focus of any reforms should be on student finance, not the funding system itself. Whilst there has not yet been a notable decline in participation rates caused by the abolition of maintenance grants, the government should monitor this situation carefully to ensure that the gap in participation rates between disadvantaged students and their more affluent peers continues to narrow.

As research by the Department for Education from August 2016 has demonstrated, the participation gap between those in receipt of Free School Meals (FSM) compared to those not in receipt of FSM has been steadily declining slowly in recent years, dropping from 19 percentage points in 2005/06 to 17 percentage points in 2013/14. Given their reintroduction would cost around £2 billion, and combined with the need for greater investment elsewhere, maintenance grants for higher education students should be considered in light of the wider education and skills system. Should participation amongst disadvantaged students start to decline, the CBI believes that reintroducing means-tested maintenance grants should be a priority, rather than changing the fee system.

You may also be interested in these articles:

Register, Login or Login with your Social Media account:


Upcoming FE Events

Advertiser Skyscrapers

Latest Education News

Further Education News

The FE News Channel gives you the latest education news and updates on emerging education strategies and the #FutureofEducation and the #FutureofWork.

Providing trustworthy and positive Further Education news and views since 2003, we are a digital news channel with a mixture of written word articles, podcasts and videos. Our specialisation is providing you with a mixture of the latest education news, our stance is always positive, sector building and sharing different perspectives and views from thought leaders, to provide you with a think tank of new ideas and solutions to bring the education sector together and come up with new innovative solutions and ideas.

FE News publish exclusive peer to peer thought leadership articles from our feature writers, as well as user generated content across our network of over 3000 Newsrooms, offering multiple sources of the latest education news across the Education and Employability sectors.

FE News also broadcast live events, podcasts with leading experts and thought leaders, webinars, video interviews and Further Education news bulletins so you receive the latest developments in Skills News and across the Apprenticeship, Further Education and Employability sectors.

Every week FE News has over 200 articles and new pieces of content per week. We are a news channel providing the latest Further Education News, giving insight from multiple sources on the latest education policy developments, latest strategies, through to our thought leaders who provide blue sky thinking strategy, best practice and innovation to help look into the future developments for education and the future of work.

In May 2020, FE News had over 120,000 unique visitors according to Google Analytics and over 200 new pieces of news content every week, from thought leadership articles, to the latest education news via written word, podcasts, video to press releases from across the sector.

We thought it would be helpful to explain how we tier our latest education news content and how you can get involved and understand how you can read the latest daily Further Education news and how we structure our FE Week of content:

Main Features

Our main features are exclusive and are thought leadership articles and blue sky thinking with experts writing peer to peer news articles about the future of education and the future of work. The focus is solution led thought leadership, sharing best practice, innovation and emerging strategy. These are often articles about the future of education and the future of work, they often then create future education news articles. We limit our main features to a maximum of 20 per week, as they are often about new concepts and new thought processes. Our main features are also exclusive articles responding to the latest education news, maybe an insight from an expert into a policy announcement or response to an education think tank report or a white paper.

FE Voices

FE Voices was originally set up as a section on FE News to give a voice back to the sector. As we now have over 3,000 newsrooms and contributors, FE Voices are usually thought leadership articles, they don’t necessarily have to be exclusive, but usually are, they are slightly shorter than Main Features. FE Voices can include more mixed media with the Further Education News articles, such as embedded podcasts and videos. Our sector response articles asking for different comments and opinions to education policy announcements or responding to a report of white paper are usually held in the FE Voices section. If we have a live podcast in an evening or a radio show such as SkillsWorldLive radio show, the next morning we place the FE podcast recording in the FE Voices section.

Sector News

In sector news we have a blend of content from Press Releases, education resources, reports, education research, white papers from a range of contributors. We have a lot of positive education news articles from colleges, awarding organisations and Apprenticeship Training Providers, press releases from DfE to Think Tanks giving the overview of a report, through to helpful resources to help you with delivering education strategies to your learners and students.


We have a range of education podcasts on FE News, from hour long full production FE podcasts such as SkillsWorldLive in conjunction with the Federation of Awarding Bodies, to weekly podcasts from experts and thought leaders, providing advice and guidance to leaders. FE News also record podcasts at conferences and events, giving you one on one podcasts with education and skills experts on the latest strategies and developments.

We have over 150 education podcasts on FE News, ranging from EdTech podcasts with experts discussing Education 4.0 and how technology is complimenting and transforming education, to podcasts with experts discussing education research, the future of work, how to develop skills systems for jobs of the future to interviews with the Apprenticeship and Skills Minister.

We record our own exclusive FE News podcasts, work in conjunction with sector partners such as FAB to create weekly podcasts and daily education podcasts, through to working with sector leaders creating exclusive education news podcasts.

Education Video Interviews

FE News have over 700 FE Video interviews and have been recording education video interviews with experts for over 12 years. These are usually vox pop video interviews with experts across education and work, discussing blue sky thinking ideas and views about the future of education and work.


FE News has a free events calendar to check out the latest conferences, webinars and events to keep up to date with the latest education news and strategies.

FE Newsrooms

The FE Newsroom is home to your content if you are a FE News contributor. It also help the audience develop relationship with either you as an individual or your organisation as they can click through and ‘box set’ consume all of your previous thought leadership articles, latest education news press releases, videos and education podcasts.

Do you want to contribute, share your ideas or vision or share a press release?

If you want to write a thought leadership article, share your ideas and vision for the future of education or the future of work, write a press release sharing the latest education news or contribute to a podcast, first of all you need to set up a FE Newsroom login (which is free): once the team have approved your newsroom (all content, newsrooms are all approved by a member of the FE News team- no robots are used in this process!), you can then start adding content (again all articles, videos and podcasts are all approved by the FE News editorial team before they go live on FE News). As all newsrooms and content are approved by the FE News team, there will be a slight delay on the team being able to review and approve content.

 RSS IconRSS Feed Selection Page