Universities 'will need more money', say vice-chancellors It comes just a week after Sir Christopher Snowdon, the UUK president and vice-chancellor of Surrey University, said the existing cap was "simply not sustainable" and "can't remain frozen forever." Last month, Prof Andrew Hamilton, the Oxford vice-chancellor, said that fees should be closer to the £16,000 a year that it currently costs the prestigious university to teach the average undergraduate. Launching today's report, Sir Christopher said higher education was an "expensive undertaking." "The rise in tuition fees in England did not give all universities extra money - it replaced substantial cuts in direct government funding," he said. We need to think very carefully about how this demand for more graduates is paid for. But however any expansion is funded, we must be able to maintain the standards that make the UK's higher education system world-class. UUK's report looks at the challenges universities and the government will face in funding any expansion of student numbers in England. In recent years, there has been a major increase in the number of people going in to higher education, with 47 per cent of the UK population holding a degree in 2011, compared with 35 per cent in 2005. At the same time, there is extra demand from employers for workers with graduate-level skills, it said, with a "significant" risk to the UK's future prosperity if demand is not met. But the report said universities would need additional income to meet the costs of the extra students. It added: "If student number controls were lifted or relaxed to support additional growth in student numbers, would the additional income flowing fees be sufficient for institutions to provide a high-quality student experience? The additional income from fees could cover ongoing costs of provision, but income would also be required for additional capital and infrastructure costs associated with expansion. Many universities are already relying on their own sources of income to fund new building projects, it said. The report also said that the impact on public finances would have to be dealt with if more students are going to university, as fee loans are provided by the Government. Sally Hunt, general secretary of the University and College Union, said: "There is no doubt that increasing student numbers is the right thing to do for the benefit of the next generation and for our economy. But looking to students and their families to pay for the increase is fundamentally incompatible with keeping a university education accessible to all, regardless of family wealth and background. Libby Hackett, chief executive of University Alliance, which represents 22 institutions, said the issue of funding had to be addressed but insisted "this does not have to involve an increase in tuition fees." "Instead of tinkering around the edges, we should be exploring intelligent reform that will address the fundamental inefficiencies of a system that spends the majority of its budget subsidising student loans that won't get paid back," she said. This is the right moment for a much bigger debate on how higher education is funded, which is why we are working with King's College London, Deloitte, Lloyds, Google and others to come up with a smarter, more sustainable solution.