Stormont officials have been asked to examine the revenue-raising potential of increasing university student fees in Northern Ireland to £7,000.
It comes as the Department for the Economy faces making 16% cuts to services due to a funding deficit of £130 million.
The department, which is responsible for skills, further education, higher education, tourism and economic development, has warned that a number of sectors will be affected by cuts. Northern Ireland Secretary Chris Heaton-Harris recently set a budget for the region in the absence of devolved ministers at Stormont.
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Several Stormont departments have since warned they are facing significant monetary challenges. Northern Irish students who study at local universities currently pay £4,630 a year in tuition fees, compared with a maximum of £9,250 to study in England.
Civil servants in the department have been told by Mr Heaton-Harris to look at a rise in tuition fees as a potential revenue-raising measure. The PA news agency understands they are examining the implications of setting the fee at £7,000.
However, any such measure would require a change in legislation which could currently only be made by a Stormont minister. Mr Heaton-Harris has been told that a change to tuition fees would take at least 18 months to be introduced and the full funding benefit would take several more years to materialise.
The Stormont powersharing institutions are currently not operating amid a DUP protest against post-Brexit trading arrangements.
The Department for the Economy has been allocated £772 million in resource funding and £246 million in capital funding for the 2023/24 financial year.
The department has been told it must replicate £75 million of savings found in the previous financial year as well as identifying further savings of £55 million. This means that the budget is £130 million (16%) lower than at the beginning of the previous financial year.
Almost three-quarters of the department’s funding goes towards supporting skills, further education and higher education. Arms-length bodies facing a cut in funding include Invest NI and Tourism NI.
Officials met representatives from arms-length bodies on Monday afternoon to set out the scale of the funding implications of the budget settlement.
The higher education sector is facing a potential £14 million cut in its grant with a £9 million cut for further education. Tourism NI is facing a £9 million cut in funding, approximately a third of the money it receives from the department.
NI Screen is facing a potential budget cut of £1 million. Other bodies facing funding cuts include the Labour Relations Agency and the Consumer Council. Public funding support to deliver some actions in the Path to Net Zero energy strategy will also be impacted.
In addition, more than 100 posts in the department which are vacant will not be filled, preventing it from increasing its workforce by roughly a tenth.
A spokesperson said: “The department will now work closely with its stakeholders to fully understand the implications of its budget.
“DfE will then publish a formal budget consultation document in the weeks ahead, setting out the proposals in detail. This process will also include the statutory duty to equality-screen any impacts in the department’s policies and programmes.”
Ulster Unionist MLA Mike Nesbitt said the cuts the department is facing are “draconian”.
He said: “This is the year we should be tooling up Invest NI to embrace the many companies looking to invest in our unique dual access to the GB and EU markets. Instead, we are telling Invest NI to take a 15% cut in budget for the second year running.
“These foreign direct investors are particularly attracted by our skilled workforce, yet it is clear further education will take a major hit in funding this year, choking the flow of newly qualified talent to the workplace.”
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