Universities in England need £12,500 per year in tuition fees to break even, a vice-chancellor has suggested.

Professor Shitij Kapur, vice-chancellor and president of King’s College London (KCL), has said the “number to ask for” was between £12,000 and £13,000.

But he told hundreds of vice-chancellors at the Universities UK (UUK) annual conference in Reading that the sector could risk looking “out of touch” if it calls on the Government to increase tuition fees from £9,250 to £12,500.

UUK will publish its blueprint in the next few weeks which will set out proposals for a “reset” of the university sector.

University leaders have warned of significant financial concerns as a result of frozen tuition fees paid by domestic students and a drop in overseas students.

You go back to 2015/2016 and if you take that as the anchor evidence break-even amount and progress it to today it's between £12,000 and £13,000 depending upon your assumptions

The previous government raised the cap on university tuition fees in England to £9,000 a year in 2012 but it has been fixed at £9,250 since 2017.

Prof Kapur, who is a commissioner of UUK’s blueprint, said part of the blueprint will address the “difficult” issue of how much money the sector needs, why it is justified, and how university leaders should ask for it.

He said: “We felt that a reasonable place to anchor the domestic undergraduate fees is a time when British universities could teach undergraduates with research-informed teaching – otherwise we’re merely teaching colleges – without being in deficit, without recourse to international student subsidy.”

Prof Kapur added: “You go back to 2015/2016 and if you take that as the anchor evidence break-even amount and progress it to today it’s between £12,000 and £13,000 depending upon your assumptions.”

He told hundreds of vice-chancellors that was the “number to ask for” if the sector wanted to return to “a reasonable time” when the sector could give the British undergraduate a world-class education that was research-informed.

I know from my visits to universities across the whole of the UK that whilst the exact cause of the funding challenge varies, we are all feeling the crunch

Speaking on a panel during the UUK conference on Thursday, the leader of the Russell Group university said £12,500 is the “right number” needed for the sector but the risk was coming across as “clueless”.

He added that the UUK’s blueprint is likely to call for increased funding for teaching to meet universities’ costs and for the teaching grant to be restored.

Addressing the conference, Dame Sally Mapstone, president of UUK, said universities “stand at a fork in the road” and the system could “slide into decline” without investment from the Government.

She said: “The most recent data shows a £1.7 billion deficit across the UK in teaching alone, with a further £5 billion loss in delivering research.

“I know from my visits to universities across the whole of the UK that whilst the exact cause of the funding challenge varies, we are all feeling the crunch.”

I can’t promise painless or immediate resolutions, but I do promise that these issues will get the attention and the commitment they deserve

In a video shown at the conference, Education Secretary Bridget Phillipson said: “These are complex problems. There are no easy answers or quick fixes.

“So I can’t promise painless or immediate resolutions, but I do promise that these issues will get the attention and the commitment they deserve.”

Addressing the conference, former Conservative universities minister Lord Willetts said now was the moment for the Government to take action, adding that “these things do not get easier, they get harder”.

Lord Willetts, who is also a commissioner for UUK’s blueprint and president of the Resolution Foundation think tank, said: “There is a deal to be done and it needs to be done urgently, and I think that is achievable.”

He added that there was “genuine anxiety” in government about universities going bust, while students are getting a “raw deal” on quality of experience.

The war on universities has ended

Lord Willetts admitted to vice-chancellors at the conference that he regretted “the loss of the means-tested maintenance grant” in England.

Addressing vice-chancellors on Thursday afternoon, Science and Technology Secretary Peter Kyle said: “The war on universities has ended.

“It ended the day that the new Labour government came in and that means that the rhetoric that talks down university is finished.”

A spokesperson for UUK said: “Today our conference discussed the fundamental problem with university finances.

“2015/16 was the last year the cost of teaching domestic students – through a mixture of tuition fees and direct government grants, known as the unit of resource – was met.

“If investment in teaching had kept up with inflation, funding per student would be in the region of £12,000-£13,000.

“To be clear, we are not calling for tuition fees to rise to this level. In fact, more and more of the burden is falling on graduates, and the UK is increasingly an outlier within the OECD on this.

“Our new research out today shows the significant benefits to the Treasury generated by graduates, and we believe it is time for a rebalancing of responsibility for funding to recognise that.”