Death by starvation

Universities must be allowed to charge some students more, says Kenneth Baker

Since the 1997 general election the best parliamentary debates on higher education have taken place in the House of Lords. Last week Roy Jenkins, chancellor of Oxford University, initiated a debate that highlighted the crisis affecting all universities. This was not just an Oxbridge gripe and a plea for more cash for an elite group of universities. Philip Norton (Conservative) spoke as an academic from Hull; Ken Woolmer (Labour, a former MP) is dean of the Business School at Leeds University; Conrad Russell (Liberal) spoke for London; and Lord Walton and Lady McFarlane for medicine and nursing.

In May 1997 the university world had high hopes of this government. Government policy since then has ranged from indifference, through hostility, to neglect. Neither the prime minister, or the deputy prime minister, or any cabinet minister, including the secretary of state for education, has made a major speech devoted to the importance of universities in our society - though Tony Blair did have two paragraphs in his Romanes lecture at Oxford last month. Higher education is low down the list of priorities of this government.

The first indictment in the Lords' debate was that higher education is losing out. Baroness Blackstone, the higher education minister, claimed that the cash increase of Pounds 295 million for 2001-02 was significant. In fact it is a real terms cut of 1 per cent in funding. The government is asking universities to take in more students for less money per student.

The second indictment was that universities are overwhelmed by bureaucracy by both government and the funding councils. The fabled independence of universities is being whittled away, undermined by people who have social rather than educational aims.

The third indictment was that university salaries have sunk to a level where the brain drain has started again in earnest. I pointed out that a university professor is paid about Pounds 40,000 a year - half the salary of a head teacher of a large comprehensive. A PhD graduate at the age of 23 will be offered a salary of Pounds 16,000 to stay on and teach, whereas graduate lawyers or accountants will have a starting salary of at least Pounds 10,000 more. I know of a lecturer who has left a northern university to go to a small provincial German university for double his salary and of two academics from Oxford who have left for America.

Baroness Blackstone skirted around this by saying that the Bett report on university salaries was asked for by the universities and so academic pay is a university problem. The government cannot wash its hands in this way. The very reputation for excellence of our universities is at risk.

I have come to the conclusion that no government is going to provide all the money universities need. When I was education secretary we had reasonable settlements for higher education but I would like to have done better. Unfortunately my successors cut back far too severely. A new approach is now needed.

When I introduced per capita funding for students, I laid the foundations of a new system that can now emerge:

The government should contract with each university to educate a defined number of students at the relevant per capita grant

Universities should be allowed to take on a greater number of students as long as they pay full fees: such students might be self-funded or funded by employers

Universities' endowments and access funds will be used to help students from less well-off families.

Under such a system, central state interference with higher education would virtually come to an end. Research funding would still have to be determined separately.

There was a plea from all sides of the House, including the Labour benches, to allow universities to charge differential fees. Universities do this, of course, for overseas students and that does not deter them from coming in substantial numbers. In the years 1994-98, the total undergraduate body of British students rose by 6,000; in the same years those coming from Europe and overseas rose by 25,000. Universities know how to handle differential fees and to give assistance to those who cannot afford them.

The changes I have outlined should be accompanied by an increase in the endowments to universities. Harvard University, as Roy Jenkins pointed out, has endowment funds of $13 billion.

There must be a much greater effort by universities to tap alumni for support: this is done in a thorough, professional and systematic way in America. It is still carried out fairly casually in the UK, concentrating on the very richest ex-students. In American universities, alumni with middle incomes are regularly asked to make donations to support scholarships. The government should also look at giving differentially advantageous tax treatment to donations to universities.

The government has set its face against all this because it is concerned that students from poorer backgrounds will be discouraged or denied access. This is simply not the case in America where there are higher participation rates. We have to move closer to that system. Universities should recognise that unless a move is made in this direction, they will still remain the poor relation in education.

In her wind-up speech, Baroness Blackstone did not tackle this issue head on. I suspect the government realises that the time for differential fees is coming. The prime minister, whose guiding hand in education is ever present, will, I suspect, move to this. It was interesting that two of the peers who spoke in the debate, Roy Jenkins and Robin Butler, both have access to Tony Blair's ear. In education that is the most important ear.

The Conservative peer Lord Baker of Dorking was secretary of state for education from 1986 to 1989. Should universities be allowed to charge differential fees?

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