Anthony Hilton: A spotlight on the real cost of education

Undergraduates should decide on the financial soundness of where they enrol

We heard on Thursday that applications for university next year had risen, more than compensating for last year's sharp dip. A relieved government says this shows that the sharp increase in tuition fees was not putting off young people from applying.

Chatting to Professor Ian Diamond, principal of Aberdeen university, provided a clearer insight into what was going on. He said the biggest drop-off last year when the new fee levels came in was not from the poorer households but from the more affluent students, as judged by their postcodes.

This of course is counter-intuitive. His explanation is that the better-off students often take a gap year but seeing the looming hike in fees many cancelled their plans so they could enrol a year earlier before the costs went up. Thus in the first year of the increase numbers fell, but mainly because a significant number were already enrolled. The real test of the new system will not be in terms of overall numbers, he says, but in a flight to quality. The government is gradually lifting the cap on the number of undergraduates any one university can enrol. This will obviously favour the better-regarded institutions, which means the less favoured will see their numbers drop. One or two are already feeling the financial strain. More are likely to follow.

It may not be too long before one goes bankrupt, given that several are already in difficulties. So on top of everything else potential undergraduates should perhaps take a view as to the financial soundness of the institution where they choose to enrol.

Mayor Michael Bloomberg of New York gave $1bn (£632m) to Johns Hopkins university the other day, becoming only the latest in a long line of successful United States businessmen who give to charity on a truly massive scale.

Over here it is different – not necessarily less generous but often much less ostentatious and harder to track – though as a guest at lunch noted last Monday, it often felt that half the buildings which make up the heritage of the City of London had been built by voluntary donations.

Our location was one of them, the Charterhouse, which is hard by Smithfield market in London and undoubtedly one of the most important Tudor monuments in the capital, given that it belonged to the Dukes of Norfolk, Elizabeth I had her first court there and it later housed Oliver Cromwell.

The complex as a whole with its buildings and quadrangles is more reminiscent of an Oxbridge college than a house at the heart of the metropolis. But most people, including the thousands who walk past it every day, barely know it exists.

It was also originally the home of the eponymous school, before that was moved out to Surrey and it remains the site of a small hospital, which provides accommodation, rather like the Royal Hospital in Chelsea does, to a small number of "brothers".

The money for the past few hundred years has come from an endowment provided by Thomas Sutton, a wealthy businessman of the time.

But inevitably it is no longer enough. The bad news is that the Charterhouse needs about £10m to maintain the fabric of its astonishing buildings; the good news is that it understands that to achieve this it will have to open itself up more to visitors to get much better known.