A new report by KPMG, commissioned by the Department for Education, reveals the varying costs of teaching undergraduate students in England. The study, titled Understanding the cost of undergraduate provision and qualifications in the higher education sector in England, highlights significant differences in expenses across subject areas and institutions.
Subject-specific costs
The most expensive subjects to teach are medicine, dentistry, and veterinary sciences, with an annual cost of £19,986. This is followed by physical sciences at £16,466 and a group including earth sciences, geography, and agriculture at £14,083. In contrast, law is the least costly at £9,475, with combined studies and social sciences also among the lower-cost subjects.
These costs exceed the maximum fee limit for students, which stands at £9,790. The weighted average cost across all subjects is £12,317, indicating that tuition fees alone do not cover the expenses of teaching in most cases.
Institutional variations
The report also notes differences in costs between types of institutions. Research-intensive universities, often part of the Russell Group, have higher teaching costs compared to smaller, teaching-focused institutions.
Based on 2023-24 TRAC data, the study involves 29 universities and 9 further education (FE) colleges. While it provides valuable insights, the sample size is limited, particularly for FE colleges, which represent only 6% of those delivering higher education.
Funding and subsidies
The Office for Students uses the strategic priorities grant (SPG) to adjust state funding. This includes a student premium for non-traditional students and a high-cost subject supplement.
Historically, the high-cost supplement was based on Subject FACTs, which used TRAC(T) data to determine average teaching costs. However, TRAC(T) data collection ceased in 2019-20, leaving the current system reliant on outdated information.
Methodology and limitations
The KPMG report uses 2023-24 TRAC data from 29 universities and 9 FE colleges, refined through provider interactions. It relies on providers’ definitions of teaching costs, which may vary.
The report employs HeCOS subject groupings, making it easier to verify student numbers and costs per student. However, the sample is biased toward the south of England and underrepresents smaller providers and FE colleges.
Cost drivers and variations
Specialist and technical courses require highly skilled staff, specialized infrastructure, and expensive equipment, driving up costs. Even within subject areas, institutional variations in curriculum design and delivery methods lead to cost differences.
Teaching at research-intensive providers is more expensive, as is delivering courses with lower student-staff ratios.
Financial pressures and implications
Staff costs have risen by only 14% since 2019, compared to a 41.2% increase in the RPIX inflation index.
The report concludes that tuition fees alone do not cover teaching costs in most cases. The strategic priorities grant remains essential for supporting high-cost subjects, but decisions on its allocation are complex, with significant implications for the future of higher education in England.
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