Tuition fees in England are among the most expensive in the world, Theresa May has admitted, as she prepares to unveil a sweeping review of post-18 education.

The 2012 move to treble fees, which now stand at £9,250 a year, has failed to create the expected “competitive market” in higher education, the Prime Minister acknowledged.

In a speech later today, Mrs May will reveal plans for a Government-led review, supported by an independent chair and panel, that will look at all aspects of university finance, including issues such as living costs, tuition fees and interest rates.

But ahead of the formal launch, there are already concerns being raised about the impact any changes – such as cutting fees – could have on universities, with sector leaders arguing that any reduction would need to be made up from other funding sources.

One expert said the key question is whether the review panel will be able to look at proposals that involve spending public money, or be tasked with coming up with ideas that have no extra cost.

Education Secretary Damian Hinds has argued that there is not as much variety in fees as originally expected, telling the BBC’s The Andrew Marr Show: “What we need to look at is the different aspects of pricing – the cost that it is to put on the course, the value that it is to the student and also the value to our society as a whole and to our economy for the future.”

POLTICS May(PA Graphics)

The review, pledged by Mrs May last autumn, comes amid widespread concern about the debt burden on students and the high interest rates, currently 6.1%, on loans, as well as whether students are receiving value for money.

The debate over university finance was initially sparked in part by a Labour Party election pledge to scrap tuition fees for future students.

In a speech this afternoon, Mrs May will acknowledge the concerns of students, parents and grandparents about the levels of debt faced by graduates.

 

“The competitive market between universities which the system of variable tuition fees envisaged has simply not emerged,” she will say.

“All but a handful of universities charge the maximum possible fees for undergraduate courses.

“Three-year courses remain the norm. And the level of fees charged do not relate to the cost or quality of the course.

“We now have one of the most expensive systems of university tuition in the world.”

Former education secretary Justine Greening has urged the Government to reintroduce maintenance grants for poorer students.

Mrs May said the review, expected to conclude next year, will “examine how we can give people from disadvantaged backgrounds an equal chance to succeed”, which includes “how disadvantaged students and learners receive maintenance support, both from Government and universities and colleges”.

The Prime Minister will also use the speech in Derbyshire to encourage a shift in the “outdated attitude” that prizes academic qualifications over technical skills.

 

Nick Hillman, director of the Higher Education Policy Institute, said: “The key question is how much room for manoeuvre they (the review panel) are going to have in terms of public spending.”

He questioned whether the panel could be asked to come up with proposals that do not involve an increase in public spending or being allowed to “spend real money”.

Alistair Jarvis, chief executive of vice-chancellors’ group Universities UK, said: “A cut in tuition fees may seem like an easy political solution, but it would see universities in England struggle to provide students with the world-class education they currently enjoy.

“Unless a cut to fees is met in full from other funding sources, we risk returning to a system where courses are seriously underfunded or the number of places capped. That would be bad for graduate skills and the economy, for social mobility and for student choice.”

Sally Hunt, general secretary of the University and College Union, said: “The Prime Minister can complain about how we have one of the most expensive systems of university tuition in the world, but it was the Conservatives that introduced it and without a radical look at the whole system little can really change.

“Worryingly, this review already looks like little more than finding new ways to cut spending on universities. Linking the price of some degrees to earnings is deeply flawed and fails to acknowledge the many factors which affect graduate income.”

Shadow education secretary Angela Rayner said: “We don’t need a review of a broken system; we need an entire restructure of the education sector. It’s time the Tories stopped tinkering around the edges of an unsustainable funding model and instead support students now.”