Leader: Proof that it really does pay to learn

The rate of return from higher education - to both individuals and the state - has been debated since well before top-up fees were on the horizon.

It had a report to itself in the Dearing Inquiry of 1997, for example, and was calculated again two years later, when graduates were said to earn 50 per cent more than contemporaries with A levels alone. The Organisation for Economic Co-operation and Development regularly highlights the salary premium enjoyed by UK graduates as among the biggest in the world. Yet there remains a widespread assumption that more students must mean less of an advantage in the labour market - and a questionable return for the economy.

The report on London South Bank University compiled by economists at PriceWaterhouseCoopers provides a timely riposte to the doubters and was the subject of much celebration at the Universities UK conference last week. For although it is about one institution, the analysis buries two of the most persistent concerns about mass higher education. It shows that, far from reducing the salary premium attached to a degree, expansion has brought greater financial benefits; and by focusing on a university with an unashamed access agenda, it demonstrates that it is not just the universities at the top of the league tables that confer social and financial benefits. Indeed, a degree from London South Bank was found to be worth more to the individual and the state than the average for all universities.

Better still for the Government, the analysis shows that the rate of return for graduates from relatively poor homes is now greater than for the more affluent majority - further encouragement for efforts to widen participation in higher education. London South Bank will score particularly well on this measure since it draws so many students from deprived areas, where an average graduate salary contrasts with the norm more favourably than in largely middle-class areas. However, another factor is the vocational character of many of its degrees, which the PwC team found to carry a higher premium than some pure academic courses. With postgraduate programmes also shown to be a "good buy" - albeit less lucrative than a first degree - the report could almost have been written as a submission for next year's Comprehensive Spending Review. Education Secretary Alan Johnson assured UUK delegates that he would press the Chancellor to live up to a promise that top-up fee income would be additional to the state's investment. Now he has independent support for his case.