Leading article: Chaos that has blighted a generation of students

Running a world-class university sector can't be left entirely to the market

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It might be supposed that students aiming to start university next year would welcome the news that cuts are to be made to tuition fees in one-third of English universities. But the lateness of the changes, which come less than three months before the university-application deadline for the academic year beginning in September 2012, is likely to create as much chaos as celebration.

Many of the 70,000 students who have already applied for courses next year – and had to sign up to courses without knowing what the fees would be – will find that they will pay less than they expected. But equal numbers who applied to cheaper universities could now discover that institutions they had decided were too expensive are now within their budgets. They will not find out for sure until 30 November, which does not leave much time to put in a fresh application before the deadline of 15 January.

This unnecessary problem is typical of the dog's dinner the Government has made of university funding in a series of moves that give every sign of having not been thought through properly, if at all. It was always paradoxical that if universities were becoming too expensive to fund from the public purse, the answer was to triple fees in a way that shifted the immediate burden from the individual student, who until last year paid fees up front, to a system where the Government pays all the costs until they can be recouped years ahead when students have graduated and are earning more than £21,000 a year.

There are good arguments for introducing some market pressures to university funding. But the Government has been too radical too quickly. Trebling fees in one go was too big a leap – motivated by the desire to inflict unrealistic levels of cuts on higher education. Those cuts pressed universities to charge the £9,000-a-year maximum fee the Government had allowed. Ministers were mysteriously taken aback by this and too late realised that this would place an additional £1bn immediate charge on taxpayers. So in the summer they announced incentives which said that universities charging under £7,500 a year would be allowed to expand. This week's changes are the universities' response to that moving of the goal posts.

Running a world-class university sector cannot be left entirely to the market because it will produce distortions – such as not enough students taking science, engineering, technology and maths courses, while at the same time arts and social science subjects risk becoming the preserve of the privately educated and affluent, as languages already have.

Some of the Government's instincts have been sound here. Standards should be raised by the incentive that allows the country's most sought-after universities to take in as many candidates with at least two As and a B as they want. It may well be that constant expansion of the undergraduate population is far from the unalloyed good suggested by the last Government, which wanted half of school-leavers to go to university. But if we are to keep numbers at present levels, those who benefit most must pay more for it.

There are social considerations, too, like the balance of subjects taken and the need to make sure that clever-but-poor students are given real encouragement and incentives to become undergraduates. It may not be a bad thing that university applications are down by 12 per cent year on year. A little more selectivity could help raise standards, too, and reduce drop-out rates. But we need to be sure that it is not the wrong people who are staying away. The Government has stumbled at every step throughout this whole process. It needs a much more coherent approach for the academic year after next.

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