The University and College Union (UCU) has urged Labour leaders Keir Starmer and Rachel Reeves to use the upcoming autumn Budget to increase taxes on profitable businesses and address the ongoing university funding crisis. The union, which represents 130,000 education workers, argues that students should not be burdened with additional debt due to previous Conservative governments’ failures to invest adequately in higher education.
On the opening day of the Labour Party conference, UCU released data showing that a 4.3 percentage point increase in corporation tax could generate £17 billion. This revenue could be used as an education levy, replacing the current tuition fee system in England with publicly funded teaching grants. This proposed levy would focus solely on England, as tuition fees are a devolved matter in Wales, Scotland, and Northern Ireland.
Under this plan, only profitable businesses would contribute to funding universities, with those making the most profit paying the most. UCU’s estimates show that an increase in tuition fees would result in each cohort of students graduating with £5.1bn more in debt and leave around six in 10 never paying their loans off, even after 40 years of repayments, according to the Office for Students. In contrast, the proposed levy would replace the £11 billion currently paid in fees by English-domiciled students each year and provide an extra £4.58 billion to the higher education sector.
The Office for Students has already warned that some English universities are at risk of financial collapse, with two in five institutions facing budget deficits. Earlier this week, UCU criticised university vice-chancellors for making reckless financial decisions, resulting in budget cuts, job losses, and minimal pay increases for staff.
UCU General Secretary Jo Grady highlighted the urgency of the situation, stating, “Labour must use the autumn Budget to increase public funding for universities and secure their long-term future. Keir Starmer and Rachel Reeves should realise there will be no decade of national renewal if the decline of our great universities goes unchecked. After the state the Tories left us in, there is a material risk of a university going under unless the Government acts.”
Grady emphasised that education is a public good that should be publicly funded. She pointed out that big businesses benefit from employing graduates and should therefore contribute to the cost of their education. “The Tories ran Britain into the ground and Labour’s victory has now given us a chance to rebuild, but this cannot be done on the cheap. If Rachel Reeves won’t borrow to invest, then she will have to tax private profit and wealth to fix universities and the broken public sector,” Grady added.
The union also warned that raising tuition fees, as suggested by the university employer body Universities UK (UUK), would see 100,000 more students per cohort never paying off their debts. This would further strain a system that is already deemed unworkable by many in the sector.
For more insights into the ongoing university funding crisis and its impact on students and staff, visit EyeOnLondon.
