Ron Dearing: Poorer students need grants of £2,500

The universities are in financial trouble and many are heading for deficits. They say they are in as much difficulty as in 1996 when a cash crisis led to the Dearing Committee being set up, with cross party agreement, to undertake a major review of higher education. We found that the universities had been under sustained pressure to get their costs down, and that the funding per student had been cut by 40 per cent over 20 years. If there is one fact of life in public finance, it is that anyone dependent on the Treasury for money will always be up against it.

So we looked around for a supplementary source of income and recommended that students should contribute a quarter of the costs of tuition, with those from less well-off homes offered loans at preferential rates of interest to be repaid after graduation at rates related to earnings. We thought that equitable because a university education is available only to a minority and in general leads to a better, more secure, higher paid job. The Government has worked out that the income benefit from being a graduate is an average of £400,000 over a working life.

If I were now asked what was to be done about the latest university financial crisis, I would probably be saying to the Government, "You only implemented our recommendation on tuition fees for the students from better-off homes. Do it for all students, and remember that this has to be extra money for the universities."

Back would come the reply, "But we already have a crisis over student debt. Your proposal to extend the payment of fees to all would make things worse for the poorer students we are desperately trying to get into higher education. Unless we can attract them, we will never hit our target of 50 per cent participation by 2010."

In which case my response is, "I am not going to argue that Dearing got it all right. We did not. But contrary to the advice of the Dearing Committee, you took away maintenance grants. In fact, the history of recent years has been of Government reducing support for the less well off by more than for students from well-healed homes. And what the Government has done by discretionary grants to help redress the balance for those in greatest need has been too complicated and uncertain to deliver the goods. The students you want to attract need a better deal, and one that avoids the present complexities."

The Government has taken the excellent decision to offer maintenance grants to 16 to 18-year-olds from poorer homes to enable them to stay on at school. This is the first step to get them to the starting gate for university entrance. The logical next step is to reintroduce maintenance grants for university students from poorer homes. I see from press reports that this is likely to be part of the promised White Paper. Good. But the Government will need to go well above the figures the Dearing Committee had in mind if, as I suggest, all students are to pay tuition fees. The poorest students would need to receive, say, £2,500 a year to give them the money that they require.

The Government is absolutely right to go for consultation on the issue, rather than a take-it-or-leave-it decision. For all our sakes, it needs to get it right this time. We cannot afford underfunded universities or a divided society in which the children of well-heeled parents are destined for university, while the others have only a one in four chance of making it. Nor, if we are to earn a living as a nation, can we afford to fall down on the Prime Minister's 50 per cent participation target for higher education. That means many more students from blue-collar homes going to university.

The Government is now well advanced on its White Paper on higher education. I have one final comment. There are implications for the universities of replacing A-levels with a broader baccalaureate. To what extent would it mean a four-year degree instead of the current three years? And if a baccalaureate were introduced, how would it affect the public and student purse?

Lord Dearing has been an adviser to successive governments on education issues

education@independent.co.uk