Richard Lambert, director general of CBI, has warned that the level of public cuts for universities in the UK may cause difficulties in education system. Some universities may find it almost impossible to get over the scale of cuts and as a result they will have to merge. Mr Lambert said that British taxpayers will face difficulties when the spending on higher education is introduced.
CBI chief says: “We know that the UK has lots of world-class universities. Eighteen out of the top 100 universities are from the UK. We’re worried at the scale of the public-spending cuts that are being discussed right now.” Moreover, he is concerned about the spending review that may inflame the situation with spending. He said that business leaders support the Government’s public-spending cuts policy and that the deficit is not to be spread over a longer period but to disappear over the period of this Parliament.
Lord Browne’s review which is expected to be published in custom papers in October will give possiblity to civil servants to factor each increased income from students into their equations. This report is expected to pave the way for Britain’s top universities to charge higher fees than others. However, according to Professor Steve Smith, the president of Universities UK, income from the increased fees would not go into Treasury coffers during five years after the first students had graduated. So, they would have to spend much money for loans.
Mr Lambert considers that the best students would seek jobs overseas in order to avoid paying high graduate tax. Those students from the European Union are likely to leave universities at the end of their courses so that they wouldn’t have to pay taxes later. He added: “Students would have an incentive to work overseas especially at a time when the top rate of tax is 50 per cent”.