Universities should set own fees, says Oxford chancellor Patten

Former diplomat backs calls for radical overhaul of higher education funding

The chancellor of Oxford University has called for the abolition of a "preposterous" £3,200 cap on student tuition fees, adding his voice to those demanding that each institution be allowed to set its own limit.

Lord Patten of Barnes told a conference of independent headteachers in London yesterday that he would do a deal with the Government and accept a limit on state funding, in exchange for the freedom for universities to charge whatever fees they wanted.

The former Tory minister is the most senior university figure to call for unlimited fees since an inquiry into student finance began last autumn.

"I would be prepared to cap the funding of our teaching grant if we were able as a result to set whatever tuition fee we wanted, provided we could demonstrate we were still guaranteeing needs-blind access with generous bursaries," the peer said.

"It is preposterous that we can only charge for teaching an undergraduate less than half the cost that those who do that teaching would have to pay for crèche facilities for their own children."

Lord Patten declined to put a figure on the fee he expected universities to levy. However, he disclosed that it cost on average £16,000 a year to educate a student, about half of which came from teaching grants, the £3,240 top-up fee and endowments. So far, neither Oxford nor Cambridge have told the review how much they would like to be able to charge. The only evidence to emerge from vice-chancellors is a survey which found they would like to see the fee raised to £7,000 a year.

Lord Patten also called for a radical overhaul of university finance – by concentrating scarce resources for research upon an elite and allowing more specialisation. "We pretend to give every 18-year-old qualified to go on to higher education the same experience at the same sort of institution," he said. "That represents an expensive and inefficient delusion. We should differentiate between different sorts of institution, prize these distinctions and devote our energy to ensuring reasonable movement by students from one sort of institution to another, according to ability."

Lord Patten also criticised Labour for failing to invest in higher education. "Whereas governments in France, Germany and the US have recently announced big increases in university funding, in this country higher education faces £1bn of cuts, with more in the pipeline," he said.

"With cuts on this scale, it is worse than insulting for Lord Mandelson [whose department is in charge of universities] to tell us the science budget is being protected, and for the Higher Education minister [David Lammy] to advise universities to apply to America for research funding."