I always thought that universities charge overseas students a premium as it's the only chance to make money?

Yes, it is incorrect to assert that overseas students pay the "real cost". They pay as high as the market will take. The real cost will be somewhere in the middle.

From speaking to someone on the board of a major UK uni, the funding provided is something like 11k, if I recall correctly. He added that if the uni opts for the 9k fees then the overall funding provided by the government in advance would jump up to 14k (presenting a cash flow problem for the government in the short term).