Universities will bid for brightest in latest reforms

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Universities will be able to enter into a bidding war for high-flying A-level students under the most radical reform of higher education for decades.

The plans, published in a Government White Paper yesterday, also give the green light to more private firms to set up degree courses.

The country's most sought-after universities will be allowed to expand their student numbers to take in as many young people as they want who have two A-grades and a B-grade at A-level.

In all, 65,000 places – about 18 per cent of the annual undergraduate intake – will be allocated this way. Universities offering cheaper degree courses – less than £7,500 a year – will also be able to recruit extra students, up to a maximum of 20,000 a year.

Universities Minister, David Willetts, said yesterday that the moves – which mean one in four places at English universities will be open bids next year – were the first step towards an even more radical shake-up of the system.

But student leaders warned it would lead to university closures particularly among the "squeezed middle" universities which cannot benefit from the deal on offer to cheap providers, and who are unable to attract many high-flyers.

Mr Willetts conceded that it could lead to the closure of less popular courses at middle-ranking universities, adding: "No government has ever said they will guarantee every institution." He said he doubted whether any institution would have to fold as a result of the measures.

The carrot offered to universities charging below £7,500 a year is seen as a way of putting pressure on institutions to cut their fees. The White Paper says it may have to rethink the definition of a "university" and even talks of providers being able to offer degrees without providing any teaching for them. Other measures include:

* giving students more information about what subjects previously successful applicants have studied, and their post-degree employment status;

* allowing students to rate their lecturers as part of a student's charter;

* allowing students to complain to trigger inspections of their course;

* strengthening Offa, the admissions watchdog, by giving it more staff;

* allowing employers and charities to sponsor university places above government limits;

* allowing students to pay off their loans early if they have the cash.