Cambridge University may be forced to go private amid fears a rise in tuition fees is not enough to allow it to compete with elite institutions in the United States, it was claimed yesterday.
Cambridge University said it would consider its options in light of Lord Browne's review and the Coalition's long-term spending plans
The university is considering the possibility of breaking free of Government control following claims a proposed reform of higher education will undermine its global standing.
It comes just days after a review of university finance called for the existing £3,290 a year cap on tuition fees to be scrapped in conjunction with the axing of almost all direct state funding for degree courses.
The move – outlined in a report by Lord Browne, the former head of BP – would give universities the power to levy higher student fees to make up for the loss of taxpayer funding.
It is claimed as much as 80 per cent of direct support for degree courses – £3.2billion – will be cut in this week’s Comprehensive Spending Review along with a further £1bn of research funding.
But some top universities fear that Lord Browne’s review stops far short of plugging the funding gap – prompting widespread concerns over standards.
Under the review, universities seeking to charge more than £6,000 face harsh financial penalties, effectively ruling out fee rises much above £12,000.
Vince Cable, the Business Secretary, is believed to favour even tighter controls and could impose a £7,000 cap when the Government’s formal response to the review is published in coming weeks.
According to reports, some universities could go private in an attempt to boost resources.
A Cambridge source told The Sunday Times: “We have a deficit of £96m a year. We are not competing with Leeds, we are competing with Harvard, Yale, Princeton and Stanford.”
Barry Sheerman, the Labour MP and former chairman of the Commons education select committee, told The Sunday Times: “I was told by Cambridge they may privatise themselves because they are so aggrieved by the cuts and by Lord Browne’s proposals.”
But a Cambridge spokesman dismissed the report as “pure speculation”.
“The university has reached no official position on these matters,” he said. “It will only take one when it has seen the Government’s response to the Browne review and the detail of the Comprehensive Spending Review.”
Other top universities have considered going private in the past.
Speaking earlier this year, Wendy Piatt, director general of the Russell Group, which represents 20 top institutions, said it was a possibility for some universities.
“That would require a lot of consideration and we would hope not to have to go there, but we would certainly have to consider more radical options,” she said.
Breaking free of state control would result in the loss of all direct funding for degrees. Students could also lose access to Government grants and subsidised loans.
But it would allow universities to charge unlimited fees as well as escaping Government scrutiny over the admission of more students from poor backgrounds.
In submissions to Lord Browne’s review, Oxford and Cambridge both called for a rise in tuition fees amid claims they were losing £200m a year by subsidising degree courses.
Oxford said it currently cost £16,000 a year to teach each student, but fees and taxpayer contributions only accounted for half. Cambridge said it had a funding gap of some £9,000 for each of its 12,000 undergraduates in 2010/11.
Universities fear losing ground to the best in the world without further funding.
Just five institutions – Oxford, Cambridge, Imperial College London, University College London and Edinburgh – were named among the top 50 in an recent international league table.