Big cash handout for universities

Universities are in line for a multi-million pound cash windfall from the Government to see them through their short-term funding crisis.

Baroness Blackstone, minister for higher education, said she is trying to combat the squeeze afflicting higher education and is hopeful of securing new cash.

Her upbeat comments are the first indication in years that universities can expect more government cash, and will be welcomed by vice-chancellors.

The money will come from internal funds at the Department for Education and Employment following a review of Whitehall expenditure. This is expected to take several months.

The move to help the universities will surprise many in education who had expected savings from the spending review to be ploughed into schools.

Lady Blackstone, a former Master of Birkbeck College, London University, said she is looking "at how we get more short- term money" into higher education. The minister added: "I am certainly hoping we will be able to find more money for the universities but we have to go through that process [the expenditure review] first."

She is particularly concerned that revenue generated by the introduction of tuition fees is unlikely to be made available to the universities for several years when repayments begin.

It was the acute funding crisis, caused by the rapid expansion of numbers in higher education, which caused the last government to set up the Dearing inquiry. When Sir Ron Dearing produced his report last month the new Government announced the introduction of tuition fees from 1998.

Lady Blackstone also predicted that the Treasury would abandon its ruling whereby student loans count as public spending and against the public sector borrowing requirement. "My own personal view is that this is something that ought to be changed," she said.

The issue has provoked controversy among vice-chancellors because, according to some academics, the Treasury's stipulation could mean that the introduction of loans to pay tuition fees will not produce any financial assistance for the universities.

Changes to the finance system are expected to take place around the year 2000 and should lead to the Treasury amending its rules governing what counts as public spending.

Several countries, including Australia and New Zealand, have more relaxed regulations, but some Treasury sources are sceptical that the shift will be as significant as that. But Lady Blackstone's view will add to the political pressure on the Chancellor to give way.

Last week the education department said the 19,000 students who had already arranged to take a "gap year" would be exempt from tuition fees.

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