David Willetts: 'We must radically rethink the way we see higher education'

It is a year to the day since David Willetts first took up his post as Universities Minister. Since then, he has had to endure his fair share of heckling from students opposed to his plans for raising tuition fees to up to £9,000 a year, engage in a battle to get his fees proposals through the Commons and spent hours burning the midnight oil on a White Paper on the future of higher education – which should see the light of day later this summer.

To be fair, most of the flak over student fees has been reserved for the Liberal Democrats, following their pledge to oppose any rises during last year's election. And Willetts is still adamant that the package that finally emerged will end up being a good deal for students.

"I think that we have achieved a hell of a lot and I think we've achieved something that's eluded successive governments," he says "We've put finance of higher education on a solid strong financial footing. If anything, more cash goes to universities, but because it comes from students and loans, it will in the long term reduce the fiscal deficit."

He makes great play of the fact students will not have to pay back on their loans until they are earning at least £21,000 a year. Indeed, the Government is working on the assumption that about a third of the debt through loans will never be repaid. And he does believe the rise in fees will lead to students getting a better deal from their higher-education institutions. This will be one of the themes of the higher education White Paper – a draft of which sits tantalisingly a few feet away from me as we speak. I can reveal that at present it is about 100 pages long.

"One thing that will be very important with the new structure is the quality of the teaching experience," he says. "I want to see universities competing, not simply by saying: 'We're charging £8,250 – down the road it's £8,750.' I want them to be saying things like: 'With your academic work, there won't be more than 30 people in seminars and lectures.' And that, rather than just a vague promise of work experience, they will say: 'We will offer two weeks in which you will do this, that and the other.' I think that will correct some of the historic weaknesses in the higher-education system – strong institutions for research offering incentives for good teaching."

He does have some concerns about the way his new fees regime will operate. Around two-thirds of universities have opted for the maximum £9,000 (although they are offering bursaries and incentives for less well-off students). If the average loan level is more than £7,500 a year, then savings will have to be made from elsewhere and the spectre of cutting student places has been raised by ministers. Labour has already put a figure on the number of places that would need to be cut as a result of the current average fee of just over £8,500: 36,000.

Willetts is adamant there are no plans for cuts in student numbers and it is not a road he would like to go down. Instead, he prefers to issue a "watch this space" warning, predicting that some universities might find it difficult to fill all their places at the fees they plan to charge. In that case, he argues, you could see them offering some wonderful incentives to recruit extra students through clearing – such as free iPods or laptops, as happened with the introduction of top-up fees in 2006.

"We will have to see how it plays out," he said. "When they go into clearing, some universities may then look at lower fees."

That, of course, could lead to them cutting their fees the following year if they anticipate they may have further difficulty filling their places. Incentives to students are more likely as it would create difficulties to have a second year and first year student studying the same course but paying a different amount for it.

He also stresses that they will face competition from further-education colleges, which may well be offering courses with the imprimatur of more elite universities online.

A survey by the Association of Colleges last month revealed the majority would be charging less than the £6,000 a year "floor" charge for higher-education courses. In addition, they may well face increased competition from the private sector, whose students will be entitled to more generous loans than in the past under the new system.

Willetts believes there will be a shift from the "leave home for three years, get campus accommodation and sports facilities". "Instead you will see delivery of higher education by packing studies into two years in some cases, delivered in an ex-office block with students studying 40 hours a week," he says.

He does have some worries about the powers of the university standards watchdog, the Office for Fair Access (Offa). When it became clear, through Oxford and Cambridge initially, that universities would be charging the maximum £9,000 a year, the Deputy Prime Minister Nick Clegg said rather haughtily that it was up to Offa, not the universities, what they could charge.

In actual fact, Offa has no power to set a fee for a university and will – under the present arrangements – allow a maximum charge provided universities can come up with an access agreement to show they are making efforts to recruit more disadvantaged students. All those seeking to charge more than £6,000 – which is every university in England – are expected to satisfy Offa on this score. In future, if they do not satisfy Offa that they are carrying through with their intentions, it will have the power to refuse them permission to charge more than £6,000, or it could even fine them.

"Offa has got a kind of nuclear option of refusing to allow university to charge more than £6,000, and fines, and not much in between," Willetts says. "One issue under consideration is whether there can be a greater gradation of sanctions – whether there could be different types of sanctions for different behaviour, apart from some really draconian sanctions, a wider range of options."

It could be (the author's speculation, not the minister's) that Offa will be able to recommend lowering fees if universities do not meet their targets, rather than, as vice-chancellors would argue, nearly bankrupt them. All this will be unveiled in that White Paper – which looks blue to me as I gaze across at it again. It is the day before the royal wedding when we speak, and David Willetts's office at the Department for Business, Innovation and Skills has a wonderful view of Parliament Square from the window – so much so that our photographer contemplates camping out for a fleeting moment. Not possible, says Willetts: the police have already informed them they cannot come in to work on the Friday.

We turn to talking about how he can see many of the offices of state from his window – including the Treasury. Half jestingly, I ask if he has ever been tempted to throw anything at it. He sidesteps the remark.

He does, however, move swiftly to deny any suggestions of a rift between him and his boss, Business Secretary Vince Cable, over policy. "We're interchangeable," he says. "Vince Willetts or David Cable."

During the referendum on alternative voting, his boss had been talking about the need to vote "yes" to ensure a left-of-centre coalition in future. Were that to happen, he would be hard-pressed to find anybody so knowledgeable about the higher-education system and dedicated to reforming it as his present partner.

The rise of 'two brains'

By any standards, David Willetts was a high-flier in the ranks of the Conservative Party. He first made his mark when, at the tender age of 26, he was put in charge of the Treasury's monetary policy division during Nigel Lawson's chancellorship. He then moved over to Margaret Thatcher's policy unit at the age of 28, and subsequently took over at the right-wing think-tank, the Centre for Policy Studies.

He became an MP in 1992 and was soon chosen for ministerial office, earning himself the moniker "Two Brains" for his intellectual theorising on future Conservative policy, a tag he has never shaken off. It was not all plain sailing for the Havant MP, though. In opposition as the party's education spokesman, he made a critique of grammar schools in a speech designed to show why the Conservatives no longer backed their re-introduction.

Although that was party policy at the time, his suggestion that they catered more for the middle classes did not go down well with Conservative backbenchers and he was subsequently moved from the post.

If anybody thought that his transfer to the universities portfolio was a case of taking on a backwater job, they have been quickly disillusioned of that during the lifetime of the Coalition Government, and Mr Willetts has steered its controversial proposals to raise tuition fees to up to £9,000 through the Commons, despite widespread student protests.

David Willett's year

May 2010 Appointed as Universities Minister under a Liberal Democratsecretary of state when the Coalition Government takes office.

October 2010 Presides over the publication of Lord Browne's report into financing higher education, which recommends a free-for-all in fees and cuts in the teaching budget of 80 per cent.

November 2010 Witnesses the first of a series of student protests over the proposal – a modification of Lord Browne's report – to allow universities to charge up to £9,000 a year.

December 2010 Gets his package through the Commons.

April 2011 Hears that just under two-thirds of English universities plan to charge the maximum possible fee of £9,000 a year.

May 2011 Still working on the finishing touches of his higher education White Paper – originally scheduled for publication in January. This will focus on what students can expect from universities in the wake of the new fees structure, and will give wider powers to Offa, the university access watchdog, over what fees universities can charge.