The National Centre for Universities and Business (NCUB) has welcomed the government's commitment in the Post-16 Education and Skills White Paper to create a more coherent, connected and collaborative tertiary system, but warned that tuition fee proposals alone are not bold enough to fix a broken university funding system.

The white paper announced the introduction of 'V Levels' vocational qualifications to sit alongside A Levels and T Levels.

Education secretary, Bridget Phillipson, also announced undergraduate tuition fee caps are set to rise in line with inflation for the next two academic years, and students' maintenance loans will have an annual uplift, linked with forecast inflation.

Ms Phillipson announced at the Labour Party Conferencelast month that maintenance grants would be reintroduced for students on courses which would support the government's new industrial strategy. This would be funded by a new levy on international students, thought to be in the region of 6%.

Dr Joe Marshall, chief executive of NCUB, said: "The white paper rightly recognises that the UK needs a tertiary system that is coherent, connected and confident — one that brings universities, colleges and businesses together to equip people with the skills our economy truly needs.

"We support the ambition for greater alignment between further and higher education, and for stronger employer engagement in shaping provision. We welcome the commitment to raise tuition fees over the coming two academic years by inflation, and plans for legislation to make this a permanent step.

"However, while we recognise and support the reintroduction of the maintenance grant to support university access to lower income students, the new levy on international students could undo the positive steps from inflation-indexed increases in tuition fees.

"We also have concerns over tying future increases in fees to teaching quality. Indeed, the UK already has robust mechanisms in place — through the Office for Students and other quality assurance frameworks — to ensure that higher education providers meet rigorous standards. It is therefore unclear what additional benefit such measures would target.

"Skills reform is economic reform. Businesses cannot compete globally without a pipeline of adaptable, higher-level skills. This white paper must be the start of a decade-long national mission — one that matches accountability with ambition, and that makes the UK the best place in the world to learn, work and innovate.

"We look forward to working with the government in this endeavour, through our role in championing university-business collaboration."