New research examines parties’ manifesto commitments on higher education funding

As part of a research project funded by the Nuffield Foundation, London Economics have undertaken a range of in-depth analyses on higher education fees and funding arrangements across the United Kingdom. The Higher Education Policy Institute is working with London Economics to publicise the results.

Following our earlier analyses of higher education fees and funding across the UK (available here), we are publishing an assessment of manifesto pledges on higher education funding ahead of the general election.

With a wide range of pressing policy and economic issues to address, few of the major parties have made specific pledges about higher education funding. Even where such pledges have been made, unsurprisingly, the manifestos include little detail on the specifics of any proposed policy. In several cases, we therefore had to interpret the parties' proposals to allow us to model their impact.

The analysis in this piece of research focuses exclusively on England, as neither the Scottish National Party nor Plaid Cymru made manifesto commitments on HE funding that were sufficiently specific and detailed to allow us to assess their impacts. As many aspects of higher education are devolved, the 2026 elections to the Senedd and to the Scottish Parliament may determine the future direction of policy in Scotland and Wales more than the 2024 general election.

In summary:

• The Conservatives are proposing no changes to the current system of fees and funding for home undergraduates (including £9,250 headline tuition fees and maintenance support provided entirely through loans). This is estimated to cost approximately £2.01bn per cohort of English domiciled undergraduate students. The taxpayer contributes 16% of the total cost of higher education provision per cohort in England, while students/graduates contribute the remaining 84%.
• The Liberal Democrats are proposing the re-introduction of means-tested maintenance grants to benefit the least well-off students:
• • The Exchequer cost per cohort would increase by £1.31bn (65%). The Exchequer would contribute 27% of the total cost of higher education provision.
  • Students from less well-off backgrounds would benefit from the re-introduction of maintenance grants. Post-graduation, although middle-and high-income graduates would benefit from slightly lower loan repayments (due to the lower maintenance loan balance), the lowest earning graduates would be unaffected because their earnings would still be insufficient to allow them to fully repay their (lower) loans.
• The Green Party is proposing the abolition of tuition fees and the re-introduction of maintenance grants:
• • The Exchequer cost per cohort would increase six-fold, by £11.94bn. This assumes that means-tested maintenance grants would be re-introduced to partially replace maintenance loans; if loans were fully replaced by grants, the increase in costs could be as much as £18.64bn. We also assume that institutions would be fully compensated for the loss in fee income through an increase in teaching block grants.
  • Under the partial loan replacement (£11.94 billion of additional costs), the Exchequer would contribute 111% of the total cost of higher education provision – i.e. on average, students would be effectively paid to attend higher education (as they would pay no fees but receive maintenance funding in the form of grants and loan write offs). However, the repayments of graduates at the very bottom of the income distribution would again be unaffected.
• Reform UK focuses exclusively on student loan repayment terms, and is proposing the removal of loan interest rates and an extension of the repayment period from 40 to 45 years:
• • The Exchequer cost would increase by £4.48bn, due to the elimination of inflation-indexed loan interest rates. The Exchequer would contribute 52% of the total cost of higher education provision. The extension of the loan repayment period would have essentially no impact in itself, and would therefore not offset any of the additional costs associated with the removal of interest rates.
  • Only middle- and high-income graduates would benefit from lower lifetime loan repayments; however, low-income graduates would be unaffected by the changes to repayment terms.

Finally, while there might be significant changes to the system to introduce a greater degree of progressivity if there were to be a Labour government, the lack of detail in the Labour Party's manifesto means that we are unable to specifically model commitments on higher education fees and funding.

Dr Gavan Conlon, Partner at London Economics, said:

‘The policies put forward by the main parties vary significantly. Although both the Liberal Democrats and the Green Party advocate a re-instatement of maintenance grants, there are insufficient details in their manifestos to assess the extent to which the significant ongoing cost of living pressures that students have been facing will be addressed. In addition, there are no concrete policies aimed at alleviating the financial pressures facing higher education institutions in the short term. If anything, the pledges by the Conservatives and Reform UK to reduce the number of degree level courses are likely to make the sector more financially unstable and increase the risk of universities needing a bailout.'

Nick Hillman, Director of HEPI, said:

‘If the manifestos are meant to provide a clear programme for government, then they flunk the test. While the smaller parties do at least make a number of proposals to reform the terms and conditions of student support, these are costly and the sources of revenue to pay for them are unclear. Meanwhile, the bigger parties fail to address the reality that higher education institutions now lose money on educating each home undergraduate. At a moment when the number of UK 18-year-olds is growing, the disincentives to recruit them are getting bigger. Meanwhile, the higher education sector is being forced to rely to an unhealthy degree on income from overseas, which is at risk from geopolitical events, economic turmoil in other countries and variables like exchange rates. The gaps in the manifestos make a major post-election review of higher education more likely.'

Dr Emily Tanner, Programme Head for Post‑14 Education and Skills at the Nuffield Foundation, said:

‘Higher education fees and funding arrangements have far-reaching consequences for the quality of degree-level education, the economy and for students themselves. The public debate tends to foreground short-term financial considerations for students, which although very important for ensuring fair access to university, are only part of the picture. London Economics' analysis adds to this the wider and long-term implications of different arrangements including the different impacts for higher and lower earning graduates.'

Notes for Editors

1. The report will be available here once the embargo lifts: https://londoneconomics.co.uk/blog/publication/general-election-briefings-examination-of-general-election-manifesto-commitments-on-higher-education-fees-and-funding/
2. London Economics is one of Europe's leading specialist economics and policy consultancies, advising an international client base throughout Europe and beyond on a range of issues in education and labour market economics, economic and financial analysis, litigation support, policy development and evaluation, business strategy and regulatory and competition policy. Their consultants are highly qualified economists who apply a wide range of analytical tools to tackle complex problems across the full range of policy spheres. For more information, see www.londoneconomics.co.uk.
3. The Higher Education Policy Institute (HEPI) was established in 2002 to influence the higher education debate with evidence. We are UK-wide, independent and non-partisan. We are funded by organisations and higher education institutions that wish to support vibrant policy discussions, as well as through our own events. HEPI is a company limited by guarantee and a registered charity.