Tuition fees in the United Kingdom were reintroduced for full-time resident students in 1998, as a means of funding tuition to undergraduate and postgraduate certificate students at universities. Since their introduction, the fees have been reformed multiple times by several bills, with the cap on fees notably rising to £9,000 a year for the 2012–13 academic year.
Background Fees prior to 1962 Before the Education Act 1962 fees existed in the United Kingdom - usually making up around a third of a university's income, the remainder supported by state subsidies and other sources of income.
1962–1998 David Eccles, Minister of Education, under Harold Macmillan's Conservative Government, published the Education Act 1962, which granted an exemption for "ordinarily resident", full-time, students from University tuition fees, along with introducing a right to a means tested maintenance grant. Fees remained in place for part-time and non-resident (overseas) students. The act remained in place till repealed in 1998.
The Dearing Report In May 1996, Gillian Shephard, Secretary of State for Education and Employment, commissioned an inquiry, led by the then Chancellor of the University of Nottingham, Sir Ron Dearing, into the funding of British higher education over the next 20 years. This National Committee of Inquiry into Higher Education reported to the new Labour Government, in the summer of 1997, stating additional billions of funding would be needed over the period, including £350 million in 1998-9 and £565 million in 1999–2000, in order to expand student enrolment, provide more support for part-time students and ensure an adequate infrastructure. The committee, as part of its brief, had controversially investigated the possibility of students contributing to the cost of this expansion, either through loans, a graduate tax, deferred contributions or means testing state assistance, as their report notes:
20.40 We do not underestimate the strength of feeling on the issue of seeking a contribution towards tuition costs: nor do we dispute the logic of the arguments put forward. A detailed assessment of the issues has, however, convinced us that the arguments in favour of a contribution to tuition costs from graduates in work are strong, if not widely appreciated. They relate to equity between social groups, broadening participation, equity with part-time students in higher education and in further education, strengthening the student role in higher education, and identifying a new source of income that can be ring-fenced for higher education.
20.41 We have, therefore, analysed the implications of a range of options against the criteria set out in paragraph 20.2. There is a wide array of options from which to choose, ranging from asking graduates to contribute only to their living costs through to asking all graduates to contribute to their tuition costs. We have chosen to examine four options in depth
The inquiry favoured means tested tuition fees and the continuation of the means tested maintenance grants as well as student loans. It recommended that graduates made a flat rate contribution of 25 per cent of the cost of higher education tuition and that a mechanism for paying for this should be established by 1998–9. Following the publication of the report, the Labour education secretary David Blunkett proposed the Teaching and Higher Education Act 1998, on 26 November 1997, to introduce means tested tuition fees from September 1998. He also announced that the student maintenance grant would be abolished and replaced by student loans.Fazackerley, A.& Chant, J."More Fees Please - The Future of university fees for undergraduate students page 19Bolton, J."Library of the House of Commons, "Value of Student Maintenance Support" Page 2, section 1.1
The government issued a response entitled "Higher Education in the 21st Century" to the Dearing Report. It stated "The Government plans to introduce an annual tuition fee of £1,000, representing about a quarter of the average cost of a course. Tuition will continue to be free for students from lower income families. Other full-time students will pay up to £1,000 per year depending on parental income. The cost of the fees will be balanced by increased loans for maintenance, also related to parental income. The overall effect will be that the total contribution required from the parents will be no greater than it is now."Bolton, Paul. "Tuition Fee Statistics", Library of the House of Commons, 23 November 2010, page 2, section 1.1
Introduction of fees (Teaching and Higher Education Act 1998) The teaching and higher education bill was passed into law on 16 July 1998. In addition to introducing tuition fees, it established General Teaching Councils in England and Wales, introduced measures to reform the teaching profession and gave a provision for certain young workers to have time off for study. Prior to the passing of the act, the House of Lords passed three successive amendments to the bill which would have meant that English, Welsh and Northern Irish students studying in Scotland would pay a total of £3,000 for a four-year course to bring them in line with Scottish students. The amendments were overturned in the Commons but only after David Blunkett promised an independent review of tuition fees and how they operated in Scotland. The length of a typical honours degree in Scotland was four years compared to three years elsewhere in the United Kingdom. The difference presented a potential anomaly for when fees were introduced. It meant that students studying at Scottish universities would be charged an extra year of tuition fees compared with students studying a comparable course elsewhere in the UK. An independent review was led by Sir George Quigley, the Chairman of Ulster Bank, looked into the issue and reported on 29 March 2000. It recommended that a fees concession should be given to students studying at Scottish universities in the final year of a four-year honours degree, if they were domiciled in other parts of the UK. It also recommended that the cost of meeting this provision should be born by the newly established Scottish Executive. The recommendations of the report were accepted by the executive at an estimated cost of between £2.5 million and £3.2 million a year.The Independent review into the funding of tuition fees in Scotland (The Quigley Report) was established as part of the Teaching and Higher Education Act 1998 which introduced tuition fees in the UK. However following the passing of the Scotland Act 1998 devolved parliament was established in Scotland. The first meeting of the new Scottish executive was held on 12 May 1999 with responsibility for tuition fees passing from the parliament in Westminster to Scotland. The Quigley report published on 29 March 2000 meant that its recommendations were now the responsibility of the Scottish and not the Westminster governments House of Commons - The Scottish Debate
Payment arrangements The act introduced a means-tested method of payment for students based on the amount of money their families earned. Students whose families earned less than £23,000 would be exempt from fees whilst those families earning between £23,000 and £35,000 a year would be charged a percentage of the fees on a sliding scale. Those families who earned over £35,000 a year would be charged the full fees which amounted to £1,000 a year. The maximum fees rose in line with inflation, reaching £1225 in 2007–08. Starting with 1999–2000, maintenance grants for living expenses would also be replaced with loans and paid back at a rate of 9 per cent of a graduate's income above £10,000. All loans would be government funded and administered by the Student Loans Company, the organisation responsible for administering loans throughout the UK.The Student Loans Company was established in order to administer the Student Loans Scheme introduced as a result of the Education (Student Loans) Act 1990 and the Education (Student Loans) Northern Ireland Order 1990. It administers tuition fee loans to cover the cost of tuition fees; maintenance loans to cover the cost of living expenses; grants for living costs to cover the cost of living expenses and bursaries and scholarships from universities. It also administers the repayment of loans through the tax system via a method known as income-contingent repayment (ICR) meaning that the obligation to repay the loan is dependent on the gross income of the account holder Student Loans Company - About Student FinanceStudent Loans Company - Remit
Reaction to the introduction of tuition fees
The decision signalled the end of the principle of free higher education and was met with concern by some in the Labour Party. Former Labour education secretary Ted Short said that he was ashamed to be a member of the party and Ken Livingstone accused ministers of "whipping away a ladder of opportunity which they themselves had climbed". On the other side of the argument top universities in the United Kingdom actually wanted to raise tuition fees further so that they could compete more on the global stage. Some universities argued for a "United States-style" system where institutions were able to charge fees at whatever rate the "market will bear". Howard Newby, the President of the Committee of Vice-Chancellors and Principals said that the challenge for universities would be in ensuring new income was "recycled" into bursaries for poorer students. Blunkett said that after the next general election it would be likely that there would be another debate on the issue revisiting the issue of university funding but that whilst he was Secretary of State there would be no top up fees. Howard Newby acknowledged that any further changes to the public funding of universities would need to wait "until after the General Election" although he added "Afterwards, the question is how to bring more resources into higher education. Fees have to be part of the equation."
Post-devolution developments in the countries of the UK
Scotland Following the passing of the Scotland Act 1998, devolved government was established in Scotland with the first meeting of the new Scottish Parliament taking place on 12 May 1999. The parliament had been given primary legislative powers meaning that over many areas elected representatives were able to pass their own laws. In particular its responsibilities included student fees, school standards and the training and supply of teachers.
The Cubie Report University funding became an issue following Scottish devolution when the Labour Party and Liberal Democrats formed a coalition government. The Liberal Democrats had made tuition fees a "non-negotiable" element of their election manifesto and therefore a potential stumbling block to forming the coalition. Labour, the majority party in the coalition had, only one year previously, introduced tuition fees in the United Kingdom of up to £1000 a year and had also abolished maintenance grants. The Cubie committee led by the lawyer Andrew Cubie was formed in July 1999 to look into the funding of higher education in Scotland to try to find a solution to the issue of student financing which threatened to destabilise the coalition.
Recommendations of the Cubie report