A pounds 3,000 degree fee

Full-time undergraduates could be facing the end of free tuition. As the Dearing Committee gears up to recommend a pounds 1,000 a year charge, experts warn of a missed opportunity. Lucy Hodges reports

Today Sir Ron Dearing and his committee, reviewing the future of higher education in the United Kingdom, meet for the last time. They will be putting the finishing touches to a 300-page report to be published next month which is expected to be controversial on a number of counts, not least because it will propose the end of free tuition for all full- time undergraduates.

The idea that is receiving the most publicity is the charging of a flat tuition fee calculated as a percentage of the average cost of educating a student. The committee has decided on 25 per cent, roughly pounds l,000 a year at current costs. To make that high proportion palatable, the plan is for students to repay it through national insurance once they graduate and their earnings reach a certain level.

A majority of the committee is thought to support that option as the best solution to the funding crisis. There is also strong support for retaining the current maintenance system - grants and loans for board and lodging. But the Government is worried about being boxed into a corner and the Department for Education and Employment has asked for a menu of options for fees and maintenance rather than one recommendation.

So, other options in the report will include Labour's manifesto commitment to replace grants and loans with new and more generous loans, learning accounts for employees, a tax-free savings scheme for other students and means-tested scholarships.

When the report is published, the pounds l,000 fee idea will meet with howls of protest from students though it is likely to be acceptable to the vice- chancellors' committee, if only because it would bring pounds 1bn into university coffers at a stroke. The Government will also be nervous about how to sell such a notion.

"The Labour Party must find themselves in a dilemma," says Phil Willis, MP for Harrogate and Knaresborough, and Liberal Democrat further and higher education spokesman. "They want to encourage more working class students into higher education. How do you reconcile that with fees of pounds 3,000 for a degree plus at least the same again for maintenance?"

Experts in university funding are also worried about the options that Dearing has come up with. Everyone agrees that universities need an injection of cash to ease the worsening funding crisis - cuts of 6 per cent are expected over the next three years - and to improve cramped libraries and outdated equipment.

But Nicholas Barr, a senior lecturer in economics at the London School of Economics and a specialist in higher education funding, sees the model of fees proposed by the committee as a missed opportunity.

"I profoundly hope that this is not what the Government accepts because it would be an appalling mistake," Dr Barr says.

He and some other experts are also concerned about the proposal to keep grants more or less as they are. "That misses the chance of a proper revamp of the student maintenance system," he says.

"With a radical new loans scheme and with student debt sold off to the private sector annually you could make more money for higher education than the pounds 1bn estimated through pounds l,000 tuition charges. Anyway, why have a grant and charge fees as well? It would be batty. To improve access it would be much better to have grants for 15 to 18-year-olds."

Students sound just as pained. The National Union of Students, which is run by a pragmatic Scot, Doug Trainer, has over the years stitched together a compromise on student maintenance. The deal was accepted by its membership and embraced by the Labour Party. It amounted to replacing student support with a loan which would be generous enough to take students out of their grinding poverty and would be repaid via national insurance once students graduated and their earnings reached a certain level. The vice-chancellors' committee also signed up to the idea, estimating that students would need to borrow pounds 4,475 a year.

The NUS can stomach students paying for maintenance out of loans but it cannot countenance students paying for their education. "It's the thin end of the wedge," Trainer says. "This suggested option of a pounds l,000 tuition fee and grants and loans staying doesn't solve the problem of student hardship. We would like to see more loan money available to students for board and lodging, and students paying back that loan through national insurance."

The NUS plans a campaign of lobbying Labour MPs, including six former NUS presidents. Its thinking is that voters at the next general election might take revenge on Labour members of a government that stung parents for pounds l,000 a year per child.

The most vulnerable MPs would be people like Lorna Fitzsimons and Phil Woolas (both ex-NUS presidents) in Labour marginals where the Lib Dems came a close second.

Higher education observers are surprised that the Dearing committee did not decide to run with the deal that had been worked out by the NUS and had support from Labour and the vice-chancellors.

"Politically I think it was silly not to have capitalised on the hard- fought-for consensus put together by the NUS," says Iain Crawford, a visiting research associate at the London School of Economics' Centre for Educational Research.

Alan Smithers, professor of policy research at Brunel University, agrees. "I thought we had a done deal on maintenance," he says. "If Dearing is not going to cash in on that, the report is going to come out as a bit of a muddle."

Indeed, there are whispers from Dearing watchers that the report, which comes with six appendices and 12 or 13 additional reports, is "a bit of a dog's dinner". It has certainly been written in a hurry. And it has been supplemented with extra argument in recent weeks at the request of ministers. One of the areas for which they asked for fuller discussion was student funding.

It is understood that members of the Dearing committee - a collection of vice-chancellors and others from old and new universities with radically differing ideas - did not unite around the notion of replacing the entire maintenance grant with a revamped loan on the grounds that it would be regressive and would deter working class students from going to university. But most accepted the idea of a fee, even one as high as pounds l,000, on the grounds that universities needed money badly.

Higher education experts do not deny that cash is urgently needed. But Nicholas Barr and Iain Crawford are concerned that Dearing has effectively opted for the Australian model of fees - the Higher Education Contribution Scheme. While they approve of the Australian scheme's repayment mechanism, they do not like its centralised planning aspect.

Set up in 1989, the Australian system introduced a flat-rate fee, a percentage of the cost of higher education, to be levied on students and paid to central government. Repayment is a fraction of graduates' subsequent earnings. At first the Australian government promised that all the money collected in that way would go into university coffers. But recently it reneged on that pledge. Now all the money from student fees flows to the Treasury and is disbursed to universities as the Treasury sees fit. Australia's best universities are seriously under-funded. As a result, a Dearing-style review is being set up to sort out the mess.

Barr and Crawford are afraid the same thing could happen here if the Government opts for a standard fee based on the Australian model as a result of the Dearing report. They believe universities should be free to charge the fees they need to maintain standards.

We now have a mass system of higher education in the United Kingdom, they argue. About 30 per cent of young people attend university. In a mass system, containing elite institutions with international reputations and former polytechnics which educate local people, it cannot be pretended that all institutions are equally good. Nor can it be claimed that all universities offer the same thing, because they do not.

Professor David Robertson, of Liverpool John Moores University, who advocates a student voucher scheme for higher education, is similarly distrustful of the central planning model for funding. He would like to see students given a percentage of the cost of higher education to "spend" where they like. "I believe that students have to have control over some of the cash," he says.

Some vice-chancellors would like to be able to charge higher fees in order to maintain standards. Professor Maxwell Irvine, vice-chancellor of Birmingham University, says: "Dearing will talk about the need to protect diversity. A diverse system is likely to have variable costs. Therefore, a uniform fee might not be the most sensible way to proceed."

And Professor David VandeLinde, an American who is vice-chancellor of Bath University, says: "Universities should be able to charge extra because people should have the choice of picking the quality and excellence that they want. But then you need to make sure that scholarships are provided to ensure that those universities don't become places peopled only by the well-to-do."

Those are exactly the issues that Dearing was set up to resolve - how to maintain or improve on access while bringing more money into the system.

The problem, as the MP Phil Willis sees it, is that additional charges by some institutions would be a political minefield. "The NUS would oppose it," he argues. "It would set up an Ivy League in Great Britain and it flies in the face of an egalitarian higher education system."

That is why Labour may opt for the simplest way out of the funding puzzle - a flat rate fee that it can sell to studentsn