One year older and no richer

Labour has achieved much in its first year in office. Potentially most significant is its success in carrying through John Major's initiative and securing a peace deal in Northern Ireland - if consent can be won for the package.

This in turn was possible only because of that other hugely important achievement: the introduction of regional assemblies and devolved powers for Scotland and Wales.

These moves, along with the proposed mayor and assembly for London, are opening up the possibility of a federal Britain under a European umbrella. They may come to be seen as the major changes introduced by the 1997 Labour government and, indeed, to run beyond anything the present government really intends.

Subsidiarity, something the Germans perfectly understand thanks to their post-war federal constitution, has meant little in Britain in recent centuries. Power has been drawn in to the centre and local government rendered increasingly powerless. That may be about to change with regional devolution following national devolution and encouraging greater local differentiation and control.

There have been other achievements. The European Convention on Human Rights is being adopted into British law.

A Labour government has managed to take power without frightening the money men into crashing the economy - even if this has been achieved by sticking to Tory spending limits and giving the Bank of England responsibility for interest rates.

Nearer to our own ground, the profits of the utilities have been skimmed to provide Pounds 3.5 billion for the Welfare to Work programme. This is the first stage in an ambitious welfare strategy where work is the key to salvation, a strategy that depends to a worrying extent on the economy's capacity to generate the jobs.

Also in education - so high on the new government's agenda - ending the assisted places scheme and turning attention to standards in ordinary state schools have changed the atmosphere surrounding state schools. There is a new and welcome air of determination to ensure that fewer children fail.

With much on the credit side and the government retaining the popularity that swept it to power, the role of party pooper is unappealing. Yet those whose main interest is higher education have so far little ground for celebration.

It would be nice if there was an opposition to do the criticising. Unfortunately there is not. Conservatives and Liberal Democrats do not agree on higher education. As a result opposition has been weakened by division. Further, the Conservative education spokesman, Stephen Dorrell, has been too nearly invisible.

Yet, with the possible exception of its treatment of single parents, the government's higher education policy has been its least successful to date. Higher education was one of the first areas of domestic policy in which decisive action was taken. Elsewhere policy reviews and commissions are still labouring away. But in higher education Dearing was assumed to have done the job. Decisions were taken fast - too fast.

The result was a wrong decision on fees and grants that has led to all kinds of second-order problems: the need to means test European students; cumbersome collection arrangements imposed on institutions; discouragement for mature students who rely most heavily on grants; confusion for students and families; greater opposition to fees than necessary because the prospect of students with debts of up to Pounds 10,000 could be blamed on the fees policy rather than the removal of grants: a tangled piece of legislation that led the government into two defeats in the House of Lords.

The government has spent most of the year trying to patch a bodged job. Some extra money was found so that the Treasury did not seem to be swallowing the extra revenue from fees. Gap-year students were let off paying. Now this week comes news from Scotland that steps are being taken to do something about the inequitable treatment of part-time students (page 1), and the first inkling in the Teaching and Higher Education Bill committee that the government may have begun to realise the risks in their top-up fee policy and be prepared to soften it to avoid unintended consequences for social justice and excellence of the kind Amartya Sen identifies (page 14).

So far the compensating vision of a seamless system offering opportunities for all adults to learn throughout life has seemed little more than words, lacking all detail in the key area of money. Even in further education where extra cash will flow through for particular programmes - Welfare to Work, the University for Industry - investment in basics such as pay, jobs and infrastructure is not yet forthcoming.

This is somewhat menacing. Ever since the Kennedy committee broke the taboo by suggesting that funding might be more equitably distributed between higher and further education, voices arguing for redistribution have become bolder. Higher education's case for extra cash is not looking promising.

Nor has all the bad news been about money. With the government's priority on schools followed by child care, further education and workplace training, higher education's needs have been sidelined. Such attention as has been paid it has been concerned with constraint, so that it did not derail egalitarian access-driven policies and plans for lifelong learning and wider access by steaming off towards American-style diversity - variable fees, variable standards, variable quality and virtually open access.

At the end of Labour's first year, higher education is, then, in an alarmingly dependent position. All hopes are pinned on the outcome of the comprehensive spending review, on the government, honouring a "compact" proposed by the Dearing committee, embraced by the vice-chancellors but as yet unacknowledged by ministers.

This compact has involved the universities agreeing to jump through the required regulatory hoops and accept (and collect) tuition fees in the hope that the government will in return end the 20-year squeeze on funding.

There are two areas in particular where they should act. The first is to address the appalling state of university pay. Higher education staff, whose productivity has increased by some 35 per cent over a decade, and who are now to be expected to welcome thousands of extra students and perform new tasks of inspection, training and fee collection, have been exceedingly patient. They are now being asked to settle for a staged pay increase totalling 2.9 per cent when inflation is running at 3.6 per cent and private-sector pay awards are averaging above 5 per cent.

Pay for university staff has fallen behind to an extent that is now grossly unfair. There is an excellent case for a one-off review of pay. This could be linked perhaps to the establishment of a pay review body and to the introduction of a minimum wage that will affect the lower paid in universities, including graduate teaching assistants.

The second area where action is essential is on the research side. The government could make a great impression and underline its determination to invest in creativity and excellence with additional money for the research base both on the funding council and on the research council side.

In Labour's first year, higher education has put its faith in the government, for which it overwhelmingly voted, to an extent that may not have been wise. Let us hope that faith is rewarded in July.