Leader: Fairness and clarity are key to viable reform

New years are meant to begin with a burst of optimism and an appetite for change. In 2003, the optimism may be tempered with caution, but no one in higher education should be taken by surprise at the prospect of change. This month's government strategy paper and likely subsequent legislation promise the most significant reforms for a generation.

The best that can be said of 2002 was that it was the year in which higher education finally reappeared on the mainstream political radar. After a 13-month hiatus, universities' financial woes suddenly became the prime focus of political debate. The apparent urgency with which ministers searched for solutions was an admission of failure of this government and its predecessors. The £8 billion shortfall in campus spending acknowledged by prime minister Tony Blair was known to be substantial before the last election, but Labour had other priorities, while the Conservatives put forward a remedy that even they discarded after a matter of weeks.

Having allowed the problems to become so acute, ministers undoubtedly see graduates as their best hope of avoiding decline and decay in higher education. The only question is whether they will be required to pay additional tax over an extended period, or merely repay a larger share of the costs of their education. We will know the answer before the end of the month, but a strategy for higher education must be about more than money.

There is a danger that fundamental questions such as the relationship between teaching and research will be lost in the political noise. This should be the moment, too, for a thorough examination of the case for getting 50 per cent of young people to experience higher education by 2010. Education secretary Charles Clarke's preference seems to be to allow the target to recede into the background while universities concentrate on broadening their social mix. But his predecessor could tell him that oppositions have a way of reviving such commitments at inconvenient moments, if they are not amended.

Behind the scenes, universities are being criticised for failing to "modernise" their management and for not playing to their strengths but clinging instead to a single academic model. But they have a right to demand clarity and consistency from the government in return. A year ago, the 50 per cent target was the overwhelming concern of ministers, and the research assessment exercise was the only source of significant extra funding for higher education managers. Now the messages from Whitehall are different, and the chancellor is said to doubt whether universities can be trusted to spend wisely the millions raised through higher fees. This may be dismissed as one more example of Treasury control-freakery. But if the view prevails in government, universities can kiss goodbye to any hopes of greater freedom from the review, forcing some into the kind of extreme action contemplated by Surrey.

Universities, particularly the older ones, are notoriously difficult to manage. At the extreme, administrators in Oxford and Cambridge have to contend with powerful colleges and a level of participatory democracy that is unknown in most fields. But even elsewhere, the unwieldy combination of senate, council and court can frustrate reformers. Committees may be bypassed, but institutions established by royal charter cannot simply be ignored.

The calibre of university management can seem pedestrian in comparison with City high-fliers. Yet British higher education has produced enviable productivity in terms of the numbers of students taught and the continued high standing of its research. The victims have been overstretched and underpaid academics, and their often impoverished students, who have to make to do with deteriorating facilities. The government has an opportunity to improve the lot of both groups in 2003.