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IFS thinktank joins row over UK university fees

By Christina Fincher LONDON, Nov 12 (Reuters) - Britain's plans to allow universities to triple tuition fees ran into fresh controversy on Friday when an independent thinktank questioned whether the public finances would be much better off as a result. The Institute for Fiscal Studies said money that the government saved on tuition funding would be largely offset by losses stemming from the increased cost of providing subsidised student loans. The thinktank's findings may stoke further anger among protestors, as well as among Liberal Democrats -- the coalition government's junior partner -- who had opposed higher fees in the run-up to the election in May which brought them to power. Protests against higher university tuition fees turned violent earlier this week when students broke into the headquarters of the Conservative party, the coalition's senior partner, smashing up the glass reception area. The government plans to cut around 3 billion pounds of annual state support for universities as part of an ambitious drive to cuts the budget deficit. The IFS, however, reckons the actual savings to the taxpayer could be as little as a tenth of that and predicts that around half of all students would have at least some of their debt written off. "The government may be saving money through cuts to funding but most of that will be offset by the higher cost of providing student loans," said IFS researcher Haroon Chowdry. "If all universities were to charge fees at the top end of the scale, the net saving to the government will be less than a tenth of the funding cut that was earmarked," he added. A review of university funding last month, conducted by former BP Chief Executive John Browne, recommended universities charging more than 6,000 pounds per year pay a levy to compensate for the higher cost of student loans. However, the government announced last week it would let universities charge up to 9,000 pounds per year -- up from the current 3,290 pound maximum -- without incurring a levy. "The levy was intended to recoup the cost to the government of providing larger loans," said Chowdry. "Without it, the cost to the taxpayer will be billions of pounds higher each year than under the system recommended by Browne." The IFS has crossed swords with the government before. In October it drew the ire of Prime Minister David Cameron when it said the government's austerity drive would hit the poor harder than the better off, despite ministers' protests to the contrary. Keywords: BRITAIN EDUCATION/IFS (London newsroom +44 207 542 7748; editing by David Stamp) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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