Government forces down student numbers with funding threat

Universities that over-recruit students may face financial penalties, ministers have warned.

In the latest letter to the Higher Education Funding Council for England (HEFCE), Universities Secretary John Denham asked that universities “minimise and preferably eliminate over-recruitment” in 2009-10.

In the clearest threat to the sector yet, university funding for the coming year will be reduced by £19 million as ministers have revised the number of additional places universities are to offer this year. Rather than the 15,000 estimate initially forwarded by the department for innovation, universities and skills, growth in the UK's universities will now be restricted to 10,000 more students.

The move follows the admission by ministers that they had underestimated the number of those additional students who would be entitled to a full student maintenance grant, and so the corresponding costs involved. The oversight has left a £200m black hole in university finances.

Denham's annual letter to the HEFC suggests that universities will not just be penalised for any financial benefit they may have gained from recruiting more students, but also for the cost of additional student support then incurred.

The cap on student admissions comes just after a recent UCAS report shows a 11.4 seven per cent rise in number of university acceptances in 2008, alongside a 10.1 per cent increase in applications. This compares to an increase last year of seven per cent in acceptance numbers. Accordingly, competition for places is likely to increase this year as increases in applications are not matched by a greater number of university places.

Shadow education secretary, David Willets, said the move will make it impossible for universities to meet the government’s target of getting 50 per cent of young people into university by 2010.

Willets said: “These figures will come as a shock to sixth formers taking A-Levels and diplomas, to people who want to up-skill during the recession and to employers needing higher skills. We cannot hope to emerge from the recession in a competitive state until there is a clearer strategy for higher-level skills.”

Chief Executive of Universities UK, Diana Warwick, expressed further concern on placing limits on the growth of higher education, saying: “What the sector needs is stable, sustainable funding to assist higher education institutions in their forward planning.

"Universities UK believes strongly that the UK's knowledge-based economy needs more, not fewer, graduates,” she added.