Diversity bought by seizing income from student fees

The government has consistently said that its priority for higher education is broadening access and that it would use money raised from student fees for both higher and further education. Today the funding council for England has begun to deliver those policies.

Further education colleges offering higher education qualifications gain most. This is partly because they are good at attracting relatively disadvantaged students and partly because they were underfunded for this work before. Colleges' higher education work will no longer be a loss leader. And they expect more good news when the further education funding council allocations are published (page 5).

Also among this week's gainers are, delightfully, a bunch of universities,accustomed to languishing at the bottom of league tables, who have come top in the competition for money for widening access. For the first time, universities that make a particular point of catering to local and less advantaged students are getting some financial recognition for the added work involved in making a success of such policies.

These are small but welcome steps towards a differentiated higher education system with diverse missions more equitably supported by public subsidy. Unfortunately, however, they are bought by depriving other universities of the full proceeds of the fees their students pay. This is not simply redistribution of public money. Public and private money (from students' fees) is being lumped together and savings from fees redistributed as if it were tax revenue. Using tax revenue for redistributive purposes is one thing, treating students' fees as general tax revenue is another.

Presumably it is fear of the resentment (and consequent action) such policies may provoke among the stronger universities that has persuaded the secretary of state for education in England and Wales that he needs to take up the reserve powers granted under the 1998 Teaching and Higher Education Act. These powers enable him to make it a condition of grant that institutions do not diverge from the Pounds 1,025 tuition fee. Powers said during passage of the legislation to be there only for use in exceptional circumstances against particular institutions and widely expected to remain dormant are to become part of the normal regulatory regime of universities.