Universities should be allowed to charge what they want in fees, says a new report by the Adam Smith Institute. ‘The Broken University’ suggests that caps on tuition fees harm the higher education sector by artificially inflating demand and devaluing degrees.

Instead, proposes James Stanfield, author of the report, universities should be able to charge any amount. Whilst fees are currently theoretically variable, they are capped (to £3,225 in England, Northern Ireland and Wales for non-Welsh students), and in practice almost all institutions charge the allowed maximum.

Mr Stanfield said that this uniformity means universities have little incentive to respond to the needs of students:

“There is a lot of talk about the importance of the universities in our new ‘knowledge economy’.

“But how effectively can any market work when the government is distorting prices to such an extent?”

The report comes just three weeks after Policy Exchange, another right-wing think tank, advised the fees cap to be raised well above £5,000, to create a true market in higher education.

Tom Clougherty, Executive Director of the Adam Smith Institute, commented:

“Universities should be able to sell their services at what price they think appropriate.”

The report garnered criticism from figures within the higher education sector, however. Wes Streeting, the President of the National Union of Students, argued:

“If the cap on fees were scrapped, a disastrous market in higher education would open up, which would see poorer students priced out of more prestigious universities and other students and universities consigned to the ‘bargain basement’.”

Senior figures from academia were also dismissive. The Universities and Colleges Union said that the proposals would ‘destroy higher education’.

A report by Universities UK last November suggested higher education already delivers economically, and this was echoed by Paul Marshall, head of the 1994 Group of research universities:

“[The Higher Education sector] drives positive social change that benefits individuals, the nation and the world.”

Source: Adam Smith Institute