English universities are spending less than half of the undergraduate tuition fee on the direct costs of teaching, figures in a report suggest.

But a large proportion of the rest still goes towards essential facilities such as libraries, so institutions should not shy away from being more open about how fee income is spent.

Those are among the main conclusions of a from the Higher Education Policy Institute, which suggests that many universities still fail to be completely transparent about how they spend students’ fees.

This is despite about three-quarters of students wanting more information on the issue, according to Hepi’s own Student Academic Experience Survey.

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The institute’s latest report, Where Do Student Fees Really Go? Following the Pound, looks at several case studies of how universities in England present information on where fee income is spent.

It says that some institutions give clear figures on how a typical £9,250 undergraduate fee is split between different activities, in one case even showing that £10 goes towards the vice-chancellor’s pay.

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But others still publish figures only on general spending by the university, the report says, and research-intensive institutions are less likely to relate spending to fees.

Among institutions that do provide a breakdown, direct teaching costs such as staff and course materials "tend to amount to between 40 per cent and 45 per cent of the fee income, or under £4,000 per student. But much of the rest is also spent on student-facing priorities”, the report says.

It explains that these other areas include buildings, IT and library provision and non-academic areas currently seen as a priority, such as mental health support.

Given the importance of some of these areas, there is no good reason why students should not have more granular information about how fees are spent, the report suggests.

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“Unless it conflicts with students’ demands, institutions should publish information on the uses of fees that show cash figures that are relatable to the actual fees paid, as well as percentages, to explain where fees go,” it recommends.

It also suggests that the term “student fees” should be used in preference to “tuition fees”, while separate income streams should be developed to pay for “valuable work that is difficult to justify funding from student fees”.

Jim Dickinson, co-author of the report and former chief executive of the University of East Anglia Students’ Union, said that despite “nudges” from the government and sector bodies, “little progress” had been made on spending transparency.

“Fears that increased transparency will lead to dissatisfaction are unfounded – and regardless of the balance between the state and student in funding higher education, students want and deserve to know where the money goes,” he said.

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However, the report appears to stop short of recommending that universities be forced to be more transparent.

Nick Hillman, Hepi director and also a co-author of the report, said: “Personally, I would give the sector one more go to do it themselves because I think centralised, bureaucratic, clunky answers are not always the best answers.”

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simon.baker@timeshighereducation.com