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English universities would be accused of mis-selling if they were regulated like financial service providers, the head of the UK public spending watchdog has said.
Amyas Morse, head of the National Audit Office, made the comments on Friday, as the public spending watchdog published a report including findings that just one-third of undergraduates in England think their courses offer value for money.
The NAO report raised serious concerns about the information available to students when choosing courses, and the protections available to them once they embark on their studies.
The coalition government pushed through a tripling of the annual tuition fees in England and Wales from 2012. As a result, universities can charge students a maximum of £9,000 per year, and students now leave three-year courses with an average of £50,000 debt according to the NAO.
At the same time, the lifting of caps on student numbers has encouraged many institutions to expand rapidly.
In recent weeks, public furore has grown over the pay of some senior university officials.
It emerged on Wednesday that Bath Spa University, a small institution in the South West, had awarded Christina Slade, its former vice-chancellor, a total pay package of £808,000 for the year to July 31, including £428,500 compensation for loss of office after she resigned.
Last month, Glynis Breakwell, the vice-chancellor of Bath University, Bath Spa University’s neighbour, was forced to announce her resignation following public pressure over her £468,000 annual pay. There has also been controversy over the £423,000 annual pay of the vice-chancellor of the University of Southampton, while staff at Birmingham University protested earlier this week over their vice-chancellor’s £426,000 yearly salary.
Sir Amyas said there had been a deliberate effort to think of higher education as a market. But he warned that the market had “a number of points of failure” in the UK.
“Young people are taking out substantial loans to pay for courses without much effective help and advice, and the institutions concerned are under very little competitive pressure to provide best value,” he said. “If this was a regulated financial market we would be raising the question of mis-selling.”
The NAO report included the results of a survey from the Higher Education Policy Institute think-tank, showing that just 32 per cent of undergraduates think their course offers value for money, compared to 50 per cent as recently as 2012.
The public spending watchdog said there is very limited price competition in the higher education market because universities have feared students would assume courses costing less than the maximum £9,000 were of lower quality.
The report also found that while the proportion of poorer students going to university has increased since variable tuition fees were introduced in 2006, the number of poorer people entering university remains relatively low, and students from poorer backgrounds disproportionately go to lower-quality institutions.
Sally Hunt, general secretary of the UCU, which represents university lecturers, said: “It is perhaps not a surprise that fewer students think their course is value for money now they face bigger debts and keep seeing stories in the press about how their vice-chancellors seem to be creaming off any profit.”
Jo Johnson, the universities minister, said on Thursday that he anticipated a new regulator, the Office for Students, would act to trim the pay of vice chancellors.
He told the BBC he also thought administrators were “starting to get it” that excess pay had been a problem.