Universities which run 'threadbare' courses could see their fees cut

Universities which run “threadbare” courses could see their fees being cut, as the Education Secretary says that degrees must be “in the interests of the taxpayer”.

Damian Hinds has criticised the proliferation of “low value, low quality” courses which churn out graduates who go into poorly paid jobs and are unable to pay back their student loans.

His remarks will be seen as a warning that a slash in fees for low quality degrees is likely to be recommended by the Augar review.

Last February Theresa May ordered a review of post-18 education led by Philip Augar, a former equities broker.

The Prime Minister came under pressure on the issue after it was felt that the Labour leader Jeremy Corbyn's pledge to abolish tuition fees won support from young voters in the last general election.

Universities can currently charge students up to £9,250 in tuition each year, but the review - which is due to be published this week - is likely to recommend a cap in fees for “creative arts” subjects from lower tariff universities.

Ministers have previously criticised universities for running “threadbare” courses in a rush to get “bums on seats”.

An analysis by the Institute for Fiscal Studies earlier this year found that "creative arts" graduates cost the taxpayer £35,000 each.

Subjects such as Music, Drama, Fine Art and Design Studies are the most costly to the taxpayer since so few alumni earn enough money to pay back their student loan in full.

Of the £9 billion that the government spends on higher education each year, more than £1 billion is on creative arts courses alone, where three-quarters of the total amount dished out in loans is picked up by the taxpayer.

Mr Hinds said that under the current fees system, all courses can charge £9,250 regardless of quality and there is “no distinction” between courses that offer a high return for graduates and the economy and those that do not.

He said universities are currently "incentivised" to generate income by expanding low cost courses that offer poor prospects to students.

"We need to be wary of having an inbuilt incentive,” Mr Hinds told the i newspaper.

"When the cost to put on a course is lower - and quite often the value is lower but the two things don't necessarily go together - there can be an inbuilt incentive to max out the volume from the review next week institution's perspective on those courses. That is what we need to guard against."

He added that action was necessary "in the interests of the taxpayer".

Alistair Jarvis, chief executive of Universities UK, said it is “irresponsible” to discourage people from studying at university when there are “such clear benefits” for graduates, business and public services.

“Students are right to expect value for money and universities are striving to deliver this and address any concerns,” he said.

“However, salary outcomes shouldn’t be the only measure of value. Many graduates work in vital roles in the public and charitable sectors or creative industries that make hugely valuable contributions to society and enrich our lives.”