Money should be transferred from universities to FE colleges that are better able to deliver higher education at a lower cost, the Association of Colleges (AoC) said in its submission to the Independent Review of Higher Education Funding and Student Finance, chaired by Lord Browne.
It said: "A sustainable higher education system in England will need to cut its cloth to fit the budget but this does not preclude reform and expansion. We believe there may be an opportunity for the HEFCE (the Higher Education Funding Council for England) to secure cost-effective expansion of higher education participation by directing funding towards colleges."
The AoC argues against raising HE tuition fees unless a way can be found to provide more scholarships and loans without increasing the cost to the Government. It suggests that higher interest rates are applied to student loans, allowing Government to extend them to more people. It also says more colleges should be handed foundation degree-awarding powers and be funded directly by the HEFCE rather than through partner universities.
A new paper from the 157 Group calls for a greater role for colleges in delivering "value-for-money, locally based higher education" at a time of cutbacks. As part of its deficit reduction plans, the Government told universities this week that they will be funded for 10,000 fewer places this year than they had been expecting.