Fees report based on “back of an envelope” calculation

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Just a week after the University published an influential report pressuring the government to lift the cap on tuition fees, one of the key figures underpinning the submission has been called into doubt.

In its submission to the Browne review on higher education funding, which will recommend whether or not the government should hike fees, the University estimated that it costs £16,000 a year to teach an Oxford undergraduate.

But an investigation by The Oxford Student has revealed that an internal University report questioned the accuracy of the figure months before it was included in the submission last week. Questioned on the figure, one college bursar this week said it is little better than a “back of the envelope calculation”.

If the sums were correct, they would suggest that teaching costs an average of £670 per undergraduate per week. Many humanities undergraduates – who often receive only two hours of tuition a week – have expressed surprise at the sum.

In its report to the Browne review, the University stated that “the full cost of teaching an undergraduate at Oxford is estimated to be about £16,000 per student per year.”

The submission relied on the calculation to argue that there was a gap of around £8,000 between the funding the University receives per undergraduate and the cost of teaching them, which needs to be partially plugged by raising fees from the current limit of £3,290 a year.

Yet an internal report to Council, the University’s governing body, in November last year stated: “In an area of this kind, there will always be different ways of estimating the total cost, and the quality of information is expected to continue improving…Some estimates would indicate this is as much as £8,000 per year.”

By the time the figure was replicated in the Browne review submission, the University had dropped its caveat that the £8,000 figure only came from “some estimates”.

Student campaigners have said that this lack of clarity could prove crucial in a report designed to influence MPs into allowing Oxford to charge unlimited tuition fees.

OUSU President Stefan Baskerville, who sat on the committee that formulated the University’s submission to former BP boss Lord Browne, questioned why the University did not repeat its earlier note of caution.

He said: “The truth is that the University doesn’t know what the gap [between government income and teaching costs] is. They have one methodology and by their own admission it is one estimate on a range of estimates that indicates it’s £8,000 a year.

“If, as they say in the November [Council] document, there’s a range of estimates, they should be open about that fact and they shouldn’t be running with the highest figure because it suits their purposes for their preferred model [of raising fees].”

Other statements in the Council report cast further doubt on the £8,000 sum. It noted that the methodology for estimating the cost of teaching was very new and was still improving in accuracy, while highlighting that it is difficult to separate the cost of undergraduate and postgraduate teaching.

Since much undergraduate teaching takes place in colleges, the figure was also “weighted” by applying the methodology – which is designed to be applied to University finances – to college accounts for the first time.

David Palfreyman, New College’s Bursar, admitted that the University’s calculation was not watertight.

“It’s one of the figures floating around. We’ve got the University doing their own study – other universities have done similar back of the envelope calculations, though this is slightly more nuanced.

“In theory it’s an accurate, accepted methodology…In all management-type calculations there are assumptions made – especially about how academics divide their time. That’s the biggest conceptual weakness, but it’s unavoidable.

“The Physics gang needs toys to play with…do the humanities crowd need all the fancy libraries?…So there’s obviously fuzziness in there, but it’s the best we’ve got,” he said.

But the University has repeatedly failed to highlight their own uncertainty about the figure.

Pro-Vice-Chancellor Anthony Monaco told this newspaper last week: “We’ve done a very careful analysis of our costs and we have an £8,000 shortfall.”

When questioned about the figure on Tuesday, Monaco said: “It is using a figure we report back to HEFCE [the funding council] using their methodology. It is the methodology that HEFCE and all of higher education uses.”

But former Vice-Chancellor John Hood was much less certain when he used the figure in evidence to Parliament last year.

At the time, he said: “Some calculations would indicate that additional cost is as much as £8,000 per year.”

Despite this caution, the national press widely recorded the estimates as fact, with headlines such as “Oxford University losing £8,000 per student”.

Simon Wood, publicity officer for the Target Schools access initiative, said that the University should have shared its doubts about the figure.

Wood said: “It’s clear that the University has sexed up the original report, dropping some very necessary caveats, in order to strengthen its case that Oxford should be allowed to charge the fees it wants.”

But Monaco said that the University did not believe there was any inconsistency between the internal report and the Browne submission.

He said: “I do not think there is any difference between the two documents. In fact the numbers submitted in the Browne Review are based on our analysis of teaching costs in the Joint Variable Fees Group and the [November] report.

“We used TRAC methodology and public University and college accounts to estimate the average cost per annum of teaching undergraduate students…Therefore the numbers are the same in both reports.”

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