Universities under pressure to fill places

Professor Alan Smithers, of the University of Buckingham, said that it was highly likely that institutions with vacancies would have to resort to discounts to persuade students to sign up.

Universities receive about £3 from the Higher Education Funding Council for England (Hefce) for every £1 that undergraduates pay, leaving them vulnerable to budget cuts if they fail to meet recruitment targets.

“We are moving in the direction of a market and there are not going to be enough UK- domiciled students to fill places this year,” Professor Smithers said. “Some universities with courses that are difficult to fill are going to have to look at how they provide incentives to attract students so that they can draw down the funding from Hefce. If they fail to fill places, that is a much more serious financial loss for the university than anything they would offer the student.”

John Dunford, the general secretary of the Association of School and College Leaders, said that fee discounts would be unfair on students that had accepted places. He added: “It is introducing the Ryanair concept to university entrance.”

But David Willetts, the Shadow Education Secretary, said that he would have no problem with the idea, adding that the Government had wanted its reforms to encourage a diversity of fees. “The fact that almost all universities are charging £3,000 is a disappointment. Discounts would be one step towards the creation of a market in which different courses charge different amounts and that would lead to more choice,” he said.

Universities UK (UUK), representing vice-chancellors and principals, reacted cautiously to the prospect of a fees war among members competing for students. A spokesman said: “We have no knowledge of institutions planning to discount fees in this way but they will all be acutely aware of the potential impact this might have.”

Drummond Bone, the president of UUK, said: “There’s a clear temptation, I can see that, but it’s a balance of the short-term fix versus the long-term reputational damage.”

Sir Martin Harris, the head of the Office for Fair Access, the university regulator, sought to head off the issue with a warning to universities in May not to introduce discounts during clearing.

“It would certainly be disappointing if, during the pressures of clearing, institutions were to give away more of the resources needed for other purposes,” he said.

A spokeswoman for the regulator said that reductions would undermine principles of fairness and equity. But she acknowledged that the regulator had no powers to stop universities discounting fees.

She dismissed comparisons with budget airlines, saying: “You can’t regard the cost of a university place as if it were an airline ticket. We believe universities should treat early and late applications the same.”

The A-level pass rate is expected to be close to last year’s record high of 96.2 per cent, with A grades awarded to almost a quarter of papers.

Jim Knight, the School Standards Minister, insisted that the Government would not countenance a return to grade quotas in response to criticism that standards were being diluted.

“Every year we get the same old tired assertions about A-level standards supposedly being lower,” he said. “We will not turn the clock back to reintroduce a system that decided a certain number of pupils would get a certain grade, regardless of how well they have done. We need an education system that is about merit not quotas.”

Miles Templeman, the director-general of the Institute of Directors, said that employers were more worried by teenagers’ poor literacy and numeracy than the debate over the “dumbing down” of A levels.