Oxford University has risked a clash with the government by claiming proposed changes to higher education funding may not be enough to compensate for savage cuts to teaching budgets.
Lifting the cap on tuition fees will fail to tackle the shortfall between the cost of teaching a student and the funding universities receive, Oxford's Vice Chancellor claimed.
Professor Andrew Hamilton warned ministers that increasing fees would not be enough to offset the £2.9 billion of university teaching budget cuts announced in last week's Comprehensive Spending Review (CSR).
In a letter published on the Oxford University website, Prof Hamilton said the university funding gap could even grow wider following the review of higher education funding by Lord Browne.
His comments, on the eve of the first Parliamentary debates on the impact of government cuts on university funding, will come as a blow to ministers who have come out in support of Lord Browne's proposals.
The Browne review recommended lifting the £3,290 cap on tuition fees, meaning institutions would be free to charge as much as much as £12,000 a year for certain courses.
But it also proposed raising student loans to £6,000 a year, with levies imposed on any university charging fees exceeding that amount.
Vince Cable, the Business Secretary, has said ministers are considering capping fees at £7,000 – more than double the current £3,290.
Prof Hamilton wrote: "Put simply, the money the state would make available in loans to support the higher fees envisaged under Browne would be largely recycled from the deep cuts to the teaching grant that flow from the CSR.
"This means that, if fees were raised to £7,000 a year – a figure that has featured prominently in Browne and in Government comment – no additional income would come to the university."
He added: "When the contribution made by tuition fees and public funding is subtracted, the annual shortfall per undergraduate every year of their Oxford career is about £8,000.
"The reality is that current proposals – the combination of Browne and CSR – do little to significantly narrow the gap and, in some variations, actually increase it."
His comments came amid growing dissent from Vice Chancellors across the country over the depth of the government's cuts to universities.
The University of Bedfordshire claimed the proposals of the CSR and Browne Review could see it lose more than £27 million, and that it would have to charge up to £8,500 in tuition fees to recover the same level of revenue.
The London School of Economics said it could lose up to £7.7 million per year – equivalent to almost all its current funding for home and EU students – while the University of Greenwich estimated it would lose 80 per cent of its teaching grant income.
Gareth Thomas, Labour's higher education spokesman, said: "To be cutting teaching budgets by anything from 75 per cent to 100 per cent is an act of quite breathtaking savagery.
"To do so at a time when economic growth is slowing, given how important Universities are to our economic future is reckless at best.”
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