Universities face serious funding problems, which will lead to a fall in the quality of both teaching and research in higher education (HE) if solutions are not found quickly.
Over the past 20 years, the number of students in HE has more than doubled to 1.6 million, and public funding for the sector has gone up in real terms by 45 per cent. But, at the same time, funding per student has fallen by 40 per cent, and investment in infrastructure has been slashed, with more funding cuts planned between now and 2000.
To fend off the worst of immediate cuts and to avoid damaging quality, universities need an extra pounds 915m by the millennium.
Over the next 20 years, they will need even more cash to allow for an expansion in student numbers, more support for part-time students, improved infrastructure, more research and higher salaries.
Who should pay?
The costs of higher education should be shared among those who benefit. Graduates in work should make a greater contribution, since their degree will earn them on average an 11-14 per cent return, and employers should pay more towards staff training and education, and towards "sandwich years" in industry for undergraduates.
Public funding of HE should be reformed so that a smaller proportion is channelled through funding bodies and more money follows the student. Public spending should increase as the nation's wealth grows.
How might fees work?
Contributions from graduates could come from one of a number of options involving payment for tuition, living costs, or a combination of the two. The committee's preferred option would see graduates make a flat-rate contribution of 25 per cent of average tuition costs for each year of their course via a subsidised income-contingent loan.
The present system of funding maintenance, in which means-tested grants are available for half the costs while loans finance the other half, would stay, but for the first time the loans would be means-tested.
The committee concludes that none of its four options provides all the extra money needed in the long term, but points out that more money could be raised in the short term by toughening even further the means test for maintenance grants and loans - potentially denying even loans for tuition to the wealthiest families. The Government would have to decide if such a move was acceptable, it says.
How could students be protected?
No increase in graduates' contribution to tuition should be allowed without an independent review and the agreement of both Houses of Parliament. All money from fees repayments should be channelled back into HE. Universities should be allowed to waive fees for students on benefits, and the social security system should be reviewed to ensure there are no financial disincentives to part-time study.
Student support should be administered by a single Student Support Agency.
Demand for HE from people of all ages will continue to grow. The UK should lift the cap on student numbers imposed in 1993 and aim to match the participation rates of other advanced nations, including the United States and Japan.
England and Wales should aim to see the number of school-leavers moving into higher education increasing from one third to at least 45 per cent - the figure already achieved in Scotland and Northern Ireland.
Much of the expansion should be at sub-degree level, such as study for the Higher National Certificate (HNC).
Because people from poorer backgrounds, ethnic minorities and the disabled are under-represented in HE, expansion funds should be targeted at institutions which can prove a commitment to widening participation.
Expansion should not be at the expense of quality. Paying students will demand the highest standards. A package of measures to safeguard degree standards, overseen by a powerful Quality Assurance Agency, should include:
An improved external examiner system, in which universities would have to draw on a national pool of recognised academic staff;
Minimum "threshold" standards defined for all qualifications by 2000 to ensure guaranteed quality;
A fair and robust complaints system;
Tighter controls on franchising of courses by universities to other institutions.
A consistent framework of qualifications should be agreed throughout the UK, involving recognised standards at each level.
There must be a change of values in higher education to afford more respect to teaching as well as to research. All new tutors in higher education would undergo compulsory training, overseen by a professional Institute for Learning and Teaching in Higher Education.
There has been no real-terms increase in government funding for research over the past decade, and UK spending on research compares poorly with competitor countries.
Research is vital to the economy and spending on it should be increased. The Government should set up a loan fund of at least pounds 400m, funded by public and private research sponsors, to support infrastructure in top- quality research departments in real need.
By 2000 - 2001, higher education institutions should ensure all students have open access to a networked desktop computer, and by 2005-2006 all students will be required to have access to their own portable computer.
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