Monday, 15 August 2016

That 2.8% - an update

I blogged a couple of weeks ago on where the 2.,8% fee increase came from.

Eagle-eyed Sweeping Leaves reader Nick Catterall identifies a plausible source. Says Nick:
"I have been working away at our CMA related updates and as a result have spent quite some time going over the recent CMA findings report. One point within this talks of clearly showing what index the inflation rate is linked to when notifying students of our ability to vary fees in keeping with inflation, using RPI as the example. With the RPI index in mind, looking at the Statista website, it shows the Office of Budget Responsibility figures as 2.8% RPI forecast for the 2nd quarter of 2017. The published forecast is from November 2015..."
And indeed the OBR November 2015 forecast does show this.  Moreover, the RPIX (RPI excluding mortgage interest payments) forecast is 2.8% for the whole of 2017. You can see all of the supporting data in the 'economic and fiscal outlook supplementary economy tables' spreadsheet. The timing fits with the policy development framework, and in particular any behind-the-scenes lobbying in relation to fees.

So it looks like the mystery about the provenance of the 2.8% may be solved. Of course this doesn't address the larger questions - is this in line with the commitments made about no automatic increases at the time of the 2010 changes? (thanks to Aaron Porter for reminding me of this) and also how exactly Universities will follow CMA guidance and indicate the inflation rate to be applied?

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