The £1bn black hole in the coalition’s tuition fees plan

Why the government will have to make even larger cuts to higher education.

Perhaps the biggest myth spread by Nick Clegg is that the size of the deficit meant the coalition had no choice but to triple tuition fees. For the record, he said:

At the time I really thought we could do it [not increase tuition fees]. I just didn't know, of course, before we came into government, quite what the state of the finances were [sic].

In reality, for the reminder of this parliament at least, the reforms will cost the government more, not less. The new fees won't come into effect until 2012, which means repayments won't kick in until 2015 for a three-year course. In the intervening period, the government will be forced to pay out huge amounts in maintenance loans and tuition-fee loans.

It's for this reason that ministers are so troubled by the number of universities planning to charge the maximum £9,000 a year. Higher fees mean higher loans. Of the 16 universities we've heard from, 13 intend to charge full whack, including Oxford, Cambridge, Imperial, University College London, Warwick, Durham, Exter, Essex, Aston, Birmingham and Lancaster. A new survey of 40 institutions by the Times (£) suggests that the average fee will be around £8,700 a year, significantly more than the £7,500 budgeted for by the coalition.

As a result, the government's reforms face a £1bn black hole. New figures from the House of Commons Library show that if the average fee is £8,600, the state will have to spend £960m more over the next four years. That could mean even bigger cuts to the teaching budget (currently facing an 80 per cent cut) and/or fewer university places.

At least 38,000 places could have to be axed to bring the costs back in line with Treasury forecasts. As I've reported before, the coalition's white paper on higher education has been delayed while ministers thrash out a solution.

There's a high chance that the funding gap will be even larger than I've suggested. The Treasury is already resigned to losing £1bn of the £3bn it pays out in student loans due to graduates moving abroad or earning wages under the new repayment threshold of £21,000 a year. But should graduate earnings increase by 3.75 per cent a year instead of 4.47 per cent, the government's assumed savings will be wiped out completely. The Breakneck Coalition has been taught another lesson in the perils of hasty reform.

George Eaton is political editor of the New Statesman.

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Appreciate the full horror of Nigel Farage's pro-Trump speech

The former Ukip leader has appeared at a Donald Trump rally. It went exactly as you would expect.

It is with a heavy heart that I must announce Nigel Farage is at it again.

The on-again, off-again Ukip leader and current Member of the European Parliament has appeared at a Donald Trump rally to lend his support to the presidential candidate.

It was, predictably, distressing.

Farage started by telling his American audience why they, like he, should be positive.

"I come to you from the United Kingdom"

Okay, good start. Undeniably true.

"– with a message of hope –

Again, probably quite true.

Image: Clearly hopeful (Wikipedia Screenshot)

– and optimism.”

Ah.

Image: Nigel Farage in front of a poster showing immigrants who are definitely not European (Getty)

He continues: “If the little people, if the real people–”

Wait, what?

Why is Trump nodding sagely at this?

The little people?

Image: It's a plane with the name Trump on it (Wikimedia Commons)

THE LITTLE PEOPLE?

Image: It's the word Trump on the side of a skyscraper I can't cope with this (Pixel)

THE ONLY LITTLE PERSON CLOSE TO TRUMP IS RIDING A MASSIVE STUFFED LION

Image: I don't even know what to tell you. It's Trump and his wife and a child riding a stuffed lion. 

IN A PENTHOUSE

A PENTHOUSE WHICH LOOKS LIKE LIBERACE WAS LET LOOSE WITH THE GILT ON DAY FIVE OF A PARTICULARLY BAD BENDER

Image: So much gold. Just gold, everywhere.

HIS WIFE HAS SO MANY BAGS SHE HAS TO EMPLOY A BAG MAN TO CARRY THEM

Image: I did not even know there were so many styles of Louis Vuitton, and my dentists has a lot of old copies of Vogue.

Anyway. Back to Farage, who is telling the little people that they can win "against the forces of global corporatism".

 

Image: Aaaaarggghhhh (Wikipedia Screenshot)

Ugh. Okay. What next? Oh god, he's telling them they can have a Brexit moment.

“... you can beat Washington...”

“... if enough decent people...”

“...are prepared to stand up against the establishment”

Image: A screenshot from Donald Trump's Wikipedia page.

I think I need a lie down.

Watch the full clip here:

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland