The education secretary has said the government is looking at allowing universities to hike tuition fees every year based on inflation to stop them going bust.
It comes less than a year after Bridget Phillipson announced that fees would increase in England for the first time in eight years as part of a major overhaul of the higher education system.
Tuition fees have been frozen at £9,250 since 2017, but in November, it was announced that they would increase in line with the Retail Price Index inflation in September 2025.
Asked whether the government would allow universities an inflation-linked tuition fee increase every year to improve their financial situation, Ms Phillipson did not rule it out.
She told BBC Radio 4’s Today Programme: “We did give universities an increase through the tuition fee increase that we delivered last year, but we’ll be looking at all of these areas around the long-term financial sustainability of universities as part of that post-16 white paper that we’ll set out later on this year.
“We do also believe alongside that further reform will be needed, but also working together with other institutions, like further education, to bring education, training opportunities and skills much closer to where people are, including those people – adults, in particular – who might be further away from the labour market.”
The remarks – which came on A-level results day – appear to set Labour on course for a clash with one of their biggest voter bases, students, and come despite Sir Keir Starmer’s promise to abolish university tuition fees entirely when he stood to be Labour leader in 2020.
He rowed back on the pledge in 2023, saying it was no longer affordable as a result of the country’s financial situation, instead promising Labour would come up with a “fairer solution” if it formed the next government.
It comes amid growing concern over the state of the education sector, with many universities facing financial crisis. As many as 40 per cent of English universities are expected to fall into a budget deficit this year, a report from the Office for Students (OfS) said.
The OfS, which regulates higher education providers, said universities needed “significant reform and efficiencies” to turn the tide, despite some institutions already closing courses and selling buildings to cut costs.
It said a drop in international students coming to the UK was the main reason for the worsening financial position.
Speaking on Thursday, Ms Phillipson said the government had already taken action to help universities, but that there is more to do.
Asked about universities’ financial struggles, she told Times Radio: “I’ve made it a priority to put our universities on a more sustainable footing.
“The action that we’ve taken in turning around the regulator, the Office for Students, much more of a focus on universities’ financial health, but also the difficult but necessary decision that we took quite early on as a government to increase tuition fees to make sure that universities have a more stable funding stream into the future.
“There is more to do and later on this year we’ll be setting out our plans for post-16 education overall, including universities, through a white paper we’ll be publishing.”
On international students, the education secretary said they made an “important contribution” to the UK’s universities and economy, and “will always be welcome in the UK”.
She added: “It is also fair to say that some institutions, their business model has allowed them to become too dependent on international students, and therefore too open to any fluctuations that may happen around that.”
