CBI seeks pounds 3bn education reforms: Employers seek twice as many graduates to keep industry competitive. Wendy Berliner reports

AN EXPANSION of Britain's higher education system, to cost pounds 3bn and lead to almost double the number of graduates by the turn of the century, is called for in a report published today by the country's biggest employer organisation.

Without the expansion, the Confederation of British Industry says, industrial competitiveness would be undermined and increasing numbers of able school-leavers would be denied university places.

The report will fuel a political debate over how best to fund further growth in the universities. The debate is being stoked by rapidly rising demand for undergraduate places and a predicted upsurge of demand from employers for graduate skills.

It calls on the Government to end the freeze on further expansion imposed last year after three years of rapid growth. It says this is forcing universities into unjustified rationing of higher education places through lack of funds. The report calls on the Government to set a minimum target of 40 per cent of young people becoming graduates by 2000. The Government plans to limit the number of people entering higher education to 33 per cent by the end of the century, but such is the demand for places that that figure has already almost been reached.

Just over 30 per cent of 18-year- olds took up a place in higher education last autumn, compared with 20 per cent in 1991. While most of these will stay until graduation, a growing number of students are forced to drop out after failing exams or because of financial hardship. If the CBI target were to be achieved it would mean a twofold increase in the number of graduates leaving British universities during the 1990s.

The report says the expansion is needed to satisfy growing demand from employers for flexible, highly-skilled employees. Employment analysts forecast a sharp drop in demand for blue-collar and clerical skills and a big increase in demand for managers, professional and technical staff. Dominic Cadbury, chairman of the CBI's education and training affairs committee, criticised the Government's decision to maintain the freeze for two years. 'Many people who have been encouraged to maximise their educational achievement and who are expecting to benefit from higher education will not now find places. That is a mistake.

'Economic success depends more than ever on the brainpower and creativity of the workforce. Without increasing numbers of able and well-motivated individuals, UK business will be unable to compete with the world's best.'

The CBI calculates the cost of the expansion at an extra pounds 3bn a year, which it says should be paid partly through economic growth and by increased efficiency in the universities. More controversially, part of the cost should be met through increased contributions from wealthy students and their families.

The Minister for Higher Education, Tim Boswell, last night rejected the idea of increasing the financial burden on parents. 'It would be impractical for universities and colleges to continue to expand at the recent breathtaking rate,' he said.

Thinking Ahead; Ensuring the Expansion of Higher Education into the 21st Century; CBI, CentrePoint, 103 New Oxford Street, London WC1A 1DU; pounds 15.

The headmaster of a top independent school was today named chairman-designate of the Government quango to oversee plans by the Secretary of State for Education, John Patten, to overhaul teacher training.

Geoffrey Parker, high master of Manchester Grammar School, will head the Teacher Training Agency when it is established in September, subject to Royal Assent to the Education Bill.

In the Bill, Mr Patten proposes to transfer responsibility for training new teachers from higher education to schools.