Today I have appointed Lord Browne of Madingley to chair an independent review of higher education funding and student finance. In addition to Lord Browne, the review will have six other members chosen for the breadth and depth of their experience and expertise. These are Michael Barber, Diane Coyle, David Eastwood, Julia King, Rajay Naik and Peter Sands. I have discussed these appointments and the terms of reference for the review, set out below, with the honourable Member for Havant. We are both committed to ensuring the independent nature of this important piece of work. The review fulfils the commitment made by the Government during the Commons stages of the Higher Education Act 2004 to review the operation of variable tuition fees after these had been in force for three years.

Variable tuition fees have provided institutions with a secure income stream worth £1.3 billion per year, which has helped to sustain the long-term financial health and viability of this crucially important sector. Over this time, the number of students attending university has continued to rise, as has the number coming from lower-income backgrounds.

To continue to thrive in the coming decade, institutions will need to respond to the changing needs of students, businesses and the wider community as well as adapt to demographic changes and growing international competition.

The independent review will consider the balance of contributions from all those who benefit from the higher education system. It will consult all those with an interest in higher education in this country, including current and potential students. The review will also convene an advisory forum to draw on the views and expertise of a range of representatives with interests in higher education.

The review will report to Government with recommendations next year. Any changes implemented following the review would come into effect in the academic year 2011-12 at the earliest.

Terms of Reference

“The review will analyse the challenges and opportunities facing higher education and their implications for student financing and support. It will examine the balance of contributions to higher education funding by taxpayers, students, graduates and employers. Its primary task is to make recommendations to Government on the future of fees policy and financial support for full and part-time undergraduate and postgraduate students”.

Notes:

1. In assessing options the review will be expected to take into account:

The goal of widening participation to ensure that the benefits of higher education are open to all who have the talent and motivation to succeed; the avoidance of the creation of barriers to wider access; the impact of the system of bursary payments; promoting fair access to all institutions; facilitating choice and a diversity of access routes to higher education, including through links with further education colleges; and the scope for a greater diversity of models of learning, such as modular and part-time study and the availability of student support for such courses.

Affordability for students and their families during their studies and afterwards; impact on public finances including affordability, sustainability and value for money for the taxpayer.

The desirability of simplification of the system of support.

2. The review will take evidence from within higher education and among those with an interest in its success, including an advisory forum to be convened by the chair.

3. The review will work with the Office for Fair Access and HEFCE and collaborate with Professor Adrian Smith's review of postgraduate study. Its work will also take into account the conclusions of Professor Sir Martin Harris's review on promoting access to higher education.

4. The review is expected to report by the autumn of 2010.