Labour’s tuition fee cut puts university projects at risk

Plans by Labour to reduce tuition fees by a third could result in universities pulling planned building projects, the Association of University Directors of Estates (AUDE) has warned.

The body of university estates directors told Building many universities may put capital projects on hold or cut back on maintenance spending amid political uncertainty in the run up to the May general election.

Douglas Alexander, Labour’s election strategy co-ordinator, this week confirmed his party will cut tuition fees from £9,000 per student to £6,000 if it wins power in the May general election.

The party will flesh out its policy on university funding later this month; it has previously said it favours transitioning from a tuition fee funding system to a graduate tax.

Andrew May, AUDE East Midlands representative and director of estates at the University of Hertfordshire, said: “Labour’s proposals will certainly make some universities stop and re-think their capital projects, but others will carry on regardless.

“The outcome of the election is a great unknown. It is not just who will get in, all the parties are unclear on what their policies are if they do win the election.”

Labour’s as yet unfunded tuition fee policy commitment provoked an angry reaction from Universities UK, the body representing university vice-chancellors, which wrote to the Times to warn the policy would leave a £10bn black hole in university finances over five years.

Marcus Fagent, EC Harris’ head of education and children’s services, told Building he estimated uncertainty over university funding “could lead to a reduction of between £0.5bn and £1bn a year in university capital spending per annum”.

Fagent described Labour’s planned cut in tuition fees, alongside the suggestion the party may introduce a cap on the number of students a university can recruit, as a “double whammy” that would constrain universities’ ability to “fund many capital projects within the sector”.

Fagent said: “This in turn could hit construction industry revenues, reduce jobs and lessen the ability of universities to be competitive in the global market for students.”

University capital expenditure stood at £2.75bn in 2013, and the sector as a whole has an estate slightly smaller than the NHS, occupying 6 million m2.

May said his own university would press ahead with its capital spending plans: “We [Hertfordshire] are not stopping because there is an election, we can’t afford to.”