Time to stop the rot - in rich and in poor countries

"A country whose universities are allowed to decline is opting out of the development process at the start of the 21st century." Richard Bourne quotes an Association of Commonwealth Universities report warning against the marginalisation of universities in developing countries. Does this warning apply also to universities in richer countries? John Kay, seared by his experience of trying to drive through a new initiative in Oxford University, writes of the "management of decline". Australian vice-chancellors, faced with an unsympathetic government, are warning that their universities are unable to keep up with international standards on the money available. In England and Wales, university leaders are this week poring over new funding announcements - so far available only in broad outline - trying to work out whether they will really be better off in the next three years, and if so how far this is thanks to increased public investment and how far it is a product of larger numbers of fee-paying students.

As participation rates in richer countries approach and pass 50 per cent, the cost to the public purse of providing a quality service free is unacceptable to governments wary of large tax increases. Nor does it seem equitable to spend so much on people who will do well later, as this week's survey of European students' careers shows. In Northern Ireland, for example, there have been high hopes of following Scotland's example in abolishing up-front fees and restoring grants, but now education minister Sean Farren is counting the cost of a policy he sees as regressive. From Australia and New Zealand to Canada and the UK, good news for university managers is increasingly bad news for students, who are paying more for their degrees and getting less state cash to support their way through them. As London saw last week, this is producing a return of student agitation, which, as participation rises, is likely to be increasingly worrying to politicians. In Scotland, the public mood was strong enough to overturn the fee regime and get grants restored. In Wales and Northern Ireland, the jury is still out.

But the news is not bad for all students. This week's announcements on further education show extra public spending at pre-university level. Skill-building below degree level has been a weakness of British education for over a century. Now there are to be more specialist centres and better-funded provision, with universities to the fore as providers, participants and advisers. It would be overstating the case to say that there is about to be a seamless post-compulsory education system, but better-funded further education with stronger university links, and qualifications forming part of a common system, may fill some of the worst gaps.

The economic advantages of a more capable workforce come in tandem with social ones. Technical change, especially in information technology, carries the risk of excluding people who have no access to modern communications and lack the skill to use them. There is much to be said for governments, in both rich and poor countries, giving priority to ensuring that half the population is not left behind. The UK government has also decided to give priority to research. New money for big science will help Britain continue as a major research power and make possible participation in international ventures such as the European Southern Observatory. Some new money for pay - though by no means enough - will help restore at least some salaries to an internationally competitive level. All in all it looks as if the British government is at last aware that its universities could face decline, and is doing something about it.