Leading article: Too rapid expansion has done universities no favours

But Lord Mandelson has sown confusion about what should happen next

The world of higher education could be forgiven for feeling perplexed, dismayed, even indignant, following Lord Mandelson's announcement that the expansion of recent years was effectively to end.

Labour committed itself in its 2001 manifesto to bringing the proportion of school-leavers entering higher education up to 50 per cent by 2010. We have always regarded that target as foolishly prescriptive; but even if we leave aside the rights and wrongs of it, this was a specific undertaking. Now, on the very threshold of the year in question, policy has swung the opposite way.

The apparent U-turn was contained in a letter sent by the Business Secretary, Lord Mandelson, to the Higher Education Funding Council for England, in which he spelt out the need for an almost £400m spending cut in the next financial year. Worst hit are likely to be those universities – many of them former polytechnics – with a vocational and skills bias, which are also being encouraged to distil their three-year courses into two.

It has long been clear that the years of plenty in government spending were at an end. There were also predictions that, with spending on frontline health services and schools expressly protected, higher education would be vulnerable. Hopes that last year's sharp increase in student places would be repeated – an increase allowed for in response to the economic downturn and lack of jobs – looked destined to be vain.

Some will see the change in a political light. The Schools Secretary, Ed Balls, a close ally of the Prime Minister, appears to have succeeded in protecting his territory, while Lord Mandelson, whose relationship with Gordon Brown has been more problematic, has not. For the losers, however, which will be a large part of the higher education sector, the reduction in funding will be severe, not least because some money is also to be recouped retrospectively, in the form of fines on universities for admitting more students than allowed for.

The question is what are we, and the university authorities, looking at? A not so stealthy abandonment by the Government of its 50 per cent target? A reversal of 10 years of higher education policy? The Government trying to claw back power from the universities? Or just a blip in the upward trend of university funding? Certainly, the signals are confused. Universities have been encouraged to expand for the sake of creating a "knowledge" economy, and so they have. Now they are to be penalised by a government which once encouraged their autonomy.

While the signals are confused, though, it is also true that not all recent expansion has been healthy. The worth of some new qualifications has still to be tested in the employment market. Rapid expansion has meant that insufficient attention has been paid to every student; in some places teaching quality and standards have been diluted, and the drop-out rate has been high. If, as seems inevitable, many universities are to be allowed to charge higher fees, students need to know they will get value for their money.

We have misgivings about Lord Mandelson's utilitarian focus – there is such a thing as education for its own sake – and we doubt that so many courses should be compressed into two years. But if access to university is to be increased, then all sides must accept that this must mean a balanced expansion of higher education as a whole, not just as defined by student numbers.