Universities face huge cash review

Plan for biggest inquiry in 30 years

JUDITH JUDD and

DONALD MACINTYRE

Ministers are considering setting up the most far-reaching inquiry into higher education for more than 30 years. The move comes as university vice-chancellors hold a meeting today to discuss whetherto impose a pounds 300 levy on new students.

The inquiry would ask fundamental questions about the expansion of universities and how to fund them. It would be conducted along the lines of the Robbins Committee, which led to a dramatic growth in student numbers and the building of new universities at the end of the 1960s.

So serious are the current funding problems that even Oxford and Cambridge have refused to rule out top-up tuition fees for students. If introduced, the top-up charges would be significantly higher than the pounds 300 entrance fee the vice-chancellors are to consider at their meeting in London today.

In the Commons on Tuesday, John Major made clear his strong opposition to such fees and claimed that state funding of universities had increased by 23 per cent in real terms over the last five years.

The likelihood of a full scale, independent, Robbins-style inquiry, an option now being actively considered in Downing Street and at the Department for Education and Employment, could partially turn on the outcome of today's meeting of the vice-chancellors.

A decision to impose entrance fees could make the establishment of such a committee a more urgent proposition.

With the proportion of 18-year-olds going into higher education now standing at nearly a third, politicians of all parties are searching for politically acceptable ways of reducing the pounds 7bn of taxpayers' money spent on higher education, without electorally disastrous consequences.

The new inquiry would question whether further expansion is sensible, and if so, by how much, what the impact would be on already worrying levels of graduate employment, how the quality of higher education can be maintained and improved, and above all, how universities would be paid for in the next century.

Politically, student financing is the most controversial and sensitive issue such an inquiry would tackle. At present, grants are being phased out and students take out loans to help pay for their living costs. Tuition is free, at present, and ministers are nervous that any proposal to introduce loans for tuition fees might alienate middle class voters.

A key political advantage in up an inquiry would be removing the burden from the Government from having to answer these dilemmas ahead of the general election.

Mrs Shephard has been conducting a review of higher education for more than a year, but Downing Street is unsatisfied with the results and a publication of even a consultative paper listing options for higher education reform has been delayed.

Before Christmas, the Government was forced to defer plans to partially privatise student loans, because the banks, who would have lent the money, refused to take part. However ministers have not abandoned hope of producing a privatised student loan scheme.

Next Wednesday, Eric Forth, the Minister for Higher Education, will speak at a conference to publicise a paper from a Tory manifesto group, which advocates privatisation. A decision by Oxford and Cambridge to charge fees would be highly controversial since wealth would clearly become one of the criteria for entry to the two most sought-after universities.

The fact that both have said previously that they would not charge top- up fees shows how the climate has changed since the Government's Budget announcement that it was cutting capital grants to universities by 50 per cent over three years.

Vice-chancellors are divided about the introduction of the pounds 300 levy, with some arguing that universities should not penalise students because of their argument with the Government. The fee would be a one-off charge to students who did not qualify for full grants, and would raise between pounds 40m and pounds 50m per year.

If the 100-plus vice-chancellors who meet in London today fail to agree, some of the best-known universities might consider introducing their own fees.

A spokeswoman for Cambridge said: "In the past we have been formally opposed to top-up fees but this is a very difficult situation and we are keeping our options open."

Lionel (later Lord) Robbins, a professor at the London School of Economics, recommended that anyone capable of benefiting from university should go and that the proportion of students in higher education should rise from eight to 17 per cent. His committee on higher education sat from 1961-4.

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