The government first said to British universities not to fear about the major cuts in higher education funding: this loss of income could be offset by lifting the cap on tuition fees. Now the government is telling universities to not charge as much as they want (or perhaps even need) or there will be a further reduction in higher education funding. Details here.
This is a public policy gone wrong. Not only has this departed in letter and spirit from the original Browne Report (which had problems enough), but now the government appears bent on punishing universities for doing precisely what they told them do. This is the wrong approach.
If ministers want to create a more free market in higher education where the cost of degrees might vary from institution to institution (and perhaps from degree programme to degree programme), then the wrong way to go about this is to impose from on high how much institutions might charge. A free market is not created where government ministers tell universities how much they can charge (especially where this may well potentially threaten the future of some institutions).
It is bad enough (in my opinion) that British higher education is not free for all. It is even worse for government ministers to espouse the desire for market liberalisation while imposing a command economy on universities which may have long term damaging effects upon British higher education. What is it with Tory politicians and damaging higher education?